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Four Insurtech Trends in 2019 for Small Insurers

Insurtech Trends in 2019

Four Insurtech Trends in 2019 for Small Insurers

Insurtech, short for insurance technology, is disrupting the insurance industry and changing the way companies serve their customers. Once limited to the industry’s biggest names, Insurtech is now accessible to insurers of all sizes.   

 

Larger companies still have more options simply because they have the resources to experiment with costly new technologies. Nevertheless, several trends are within reach to smaller insurers. Here are those powering the most change today.

 

Four Insurtech Trends for 2019

1. Apps and Mobile-Friendly Websites

It’s no surprise that mobile technology is one of today’s most influential insurtech trends. In 2018, nearly half of the world’s internet traffic took place over mobile apps, and that’s not all:

  • App spending has more than doubled since 2015.
  • The average person uses nine apps every day and has more than 80 installed.
  • 32 percent of people check apps one to ten times a day.
  • Nine out of ten customers enjoy communicating with businesses via apps.

Mobile commerce is hot as well. It exceeded 35 percent of all e-commerce sales in 2017, and it’s expected to reach 54 percent by 2021. Many insurance companies are getting on board with mobile-friendly websites and apps, but adoption is nowhere near universal yet.

This is a great space for the small insurer to get an edge, largely because mobile-friendliness is a financially accessible process. It doesn’t require a large up-front investment or widespread adaptation of systems, so it’s attainable for smaller insurers.

2. Machine Learning

Using machine learning sounds like an expensive proposition. A computer that learns about your customers and uses that knowledge to take action? How could that not break the bank?

The answer used to be “it does,” but fortunately for the small insurer, machine learning has become much more mainstream. Service providers across industries are offering machine learning programs to businesses of all sizes.

The field is becoming so commonplace that, according to leading research firm Gartner Inc., 85 percent of all customer service interactions will soon take place without a human representative.

Machine learning powers this kind of automation. It is the driving force behind many insurtech innovations, such as:

  • Policy lapse management, which lets insurers automatically identify policies that are approaching their expiration date and schedule contact with the insured;
  • Fraud detection, which matches claim information with available data to identify potentially fraudulent actions; and
  • Policy selection, which suggests coverage to consumers based on recent life events.

When you consider the potential cost and time savings inherent in these kinds of tools, you can easily see why insurers of all sizes are embracing machine learning.

3. Internet of Things and Device Connectivity

The Internet of Things, or IoT, is another technology trend that sounds much less accessible than it actually is. The term refers to any system of internet-enabled devices able to communicate with one another.

IoT doesn’t have to involve investment in new equipment—fitness trackers, virtual assistant devices, and even smartphones are all useful IoT devices.

To make these devices work for you as an insurer, you just need software that allows you to collect information from customers. Consider these possibilities:

  • A health insurance company could invite customers to sync fitness trackers and other health tracking apps to their app, thus providing data to help the company make better coverage suggestions.
  • Auto and property insurance customers could integrate their smartphone cameras with their insurer’s app or website, sending pictures of any damage and allowing for faster processing of claims.
  • Auto insurers can offer discounts to customers who link their car’s telematics or safety technologies to the insurer’s system, helping insurers to better understand a customer’s risk profile.

For these kinds of strategies to work, your customers must be willing to opt in. Additionally, full and explicit consent is required for any kind of data gathering by an insurer to be ethical.

Many customers will get on board faster if you give them an incentive, whether it’s a discount on a health insurance policy or a guaranteed-faster claim payout. And if your customers are okay with delayed gratification, mentioning that IoT strategies have helped some insurers to lower their premiums by up to 25 percent may be persuasive.

4. Automated Underwriting and Claims Processing

Customers like it when their policies are confirmed and their claims paid promptly. Small insurers often have difficulty meeting these expectations because there aren’t enough resources to go around.

Automation can fix that, too, and it’s easier than you might think. The McKinsey Global Institute estimates that as many as 45 percent of all work processes in the US can be automated using existing technology.

Underwriting, for instance, can become significantly more efficient and accurate with the use of robotic process automation (RPA). AI technology allows insurers to process straightforward applications automatically, saving time and requiring fewer paid labor hours. When software takes over these processes, staff members are free to spend time on direct customer service and other more complex applications.

Similar cost and time savings is possible with automated claims handling and processing. The difference between these two tasks is in the degree of automation. Automated handling simply involves sending pictures or video to a human adjuster; automated processing has software doing most of the work. Benefits include:

  • Processing costs reduced by up to 50 percent;
  • Processing times reduced to as little as two weeks; and
  • Up to 10 times more claims processed per adjuster.

Shorter processing times translate to increased customer satisfaction. Similarly, reduced costs are beneficial to carriers and customers alike. Everyone wins.

The Takeaway

Insurance technology benefits small insurers across the value chain and on multiple levels. It allows you to make the most of your available resources while positioning you as an industry leader.

To gain the biggest advantage from these technologies, you need the support of an experienced insurtech provider. CIO Applications Magazine assembles and publishes a yearly list of top insurtech companies. In 2018, CHSI Connections joined the roster.

CHSI Connections can identify the right insurtech solutions for your business. No matter the size of your operations, we have something that can help you. Get in touch today and find out how.