TL; DR: The insurance industry certainly faces challenges as any other. And it needs to scale fast! Mainly related to transparency and security, challenges can be worked out hand-in-hand with consumers. There’s tons the latest forms of technology can continue to do to help boost insurance on the spot. Here’s how cutting-edge technology and talented teams around the world can continue to drive much-needed innovation.
According to McKinsey & Company, “the total amount of VC invested in insurtechs surpassed $11 billion” during 2021 alone. Such investments were considerably higher than those in “the more mature private-equity or public-markets funding.” According to this source, what this is doing is adding pressure for insurtechs to scale － and to do so very fast.
The spike shouldn’t have come as much of a surprise considering the insurance industry’s sustained increase on information technology (IT) expenditure over recent years. By February 2022, finance and insurance statistics on the topic already signaled an exponential jump in IT spending that went from 76 million U.S. dollars allocated to software for cognitive/AI technologies in 2016 to a 2021 expectation of 571 million U.S. dollar for the same. That’s an increase of over 650 percent in a matter of 5 years.
Back in May of this year, I wrote about the next 3 pivotal changes for insurance companies. In that note, I shared three clues to understanding the future of insurtech. Only a few months have passed since that update and there’s still tons to be discussed. In this article, we’ll go over a few AI measures and other implementations as we continue to engineer the future.
How Artificial Intelligence can help insurance on the spot
Artificial Intelligence (AI) is capable of cleansing data. It can then also analyze and compile it from a numerous amount of data sources. With better data, insurance companies can engage in diverse kinds of prevention while also cutting back on liability. And the latest technologies can certainly boost current risk assessment capabilities.
A simple automation of insurance processes related to claims and damage evaluation can already significantly increase a company’s performance to swiftly suit diverse client needs.
But let’s also consider virtual 3-D mirror images of points of interest for a second. For the insurance industry, these tools can mean enhancing what up to now are normally only partially complete statements of value. In the end, these are the standing grounds of risk assessment. With AI-based technologies, properties and surrounding areas can be assessed by means of visual representations for a more thorough risk assessment, for example.
The integrations are endless
In the motor insurance sector, for instance, AI predictions can help assess likelihood of fraud while robotic process automation (also known as RPA) can directly deal with individual factors around claims. That is but a single example of possible functions. In reality, tech integrations to virtually any field are endless. At Blankfactor, our specialty are the applications to the fintech, banking, insurance, capital markets, and payments sectors.
By our data scientists and architects’ work around data structuring over the years, we’ve learned that many machine learning applications can contribute to sophisticated analysis. In turn, these can mean better pricing, scoring, and predictive models for any industry.
Areas for further growth
We certainly can’t deny what seem to be the big elephants in the insurance field. Regulation and surveillance are two key areas that commonly stir concerns in any insurance-related room.
Yet, many of the needs in this respect have to do with data handling as much as transparency. Ethical and legal handling of data, as much as its sourcing and monitoring, are tied to an even greater concern around social biases. That’s especially the case in the use of algorithms and data sets. That much is clearly noted.
Related read: How fintechs can improve bias in machine learning
Fortunately, a digital transformation process can offer patrons exactly that: clarity in every step. The counteractive strength of digital platforms is how they bear the power of more visible and transparent insurance life cycles.
Why RegTech is the perfect ally for insurance companies
There are numerous ways companies can safely operate in their respective jurisdictions with the latest technologies. Particularly given everything the latest RegTech has to offer. As we have said before, whenever we set out to create groundbreaking insurtech products, security isn’t just an item in a long checklist. It can’t simply be an afterthought. For us, security and a proper use of cutting-edge technology is a key part of developing digital products.
What’s great about the benefits to excelling work on above is the competitive edge. That includes accelerated growth and optimized user experiences and products. These tools can guarantee an overall enhanced performance for medium to large-sized companies around the globe.
A fortunate plus to the above considerations is just how willing consumers in this industry are to give out information that gets them better services, too. In this sense, a solid data strategy with the right insurance and technology partner can certainly make an incredible difference.
Welcome ethical frameworks for insurance on the spot
Let’s expand upon integrating consumers as part of our development processes. Giving users access to their assessment results can be an effective means to tackle any biases. Very much tied to a user-centric approach, companies can let users question those. These can also mean added room for much-needed corrections.
Organizations can also add a clear point of contact for every specific case. And, in this sense, even consider the most effective chatbot integrations to get closer to superbly – and transparently – tackling client needs.
Also, just as a side note, diverse teams also help tackle social biases. We’ve touched upon the creation of team diversity in the past.
All of these diverse processes can get us closer to fulfilling consumer needs around insurance on the spot. These measures are bound to assist a greatly sought-after transparency in this field.
Have any thoughts on how we can help?
Contact us to let us know of your project, insurance, and tech-related needs and our teams will be happy to assist with a careful consideration of how our world-class talent can help create the next disruption in your field.