P&C Insurance industry is lagging with its digital transformation initiatives. The Insurance industry generates around $5 trillion revenue* annually and out of which P&C Insurance contributes $1 trillion.
Even though P&C Insurance is huge, its affiliation with the technology is not as evident when compared with other industries. Not just that, it is also one where disruption is yet to happen on a grand scale.
Due to the pandemic, the year 2021 has expedited the adoption of the latest technologies, and the future looks bright as the Insurance Industry is all set to match the standards established by other Industries like Retail, Manufacturing, etc.
Let us see what type of technologies are on the forefront and the kind of impact it creates.
Digital Transformation Trends in P&C Insurance for 2023:
- IoT and Telematics
- AI and Automation
- Blockchain Technology
- Digital Adoption Platform
IoT and Telematics:
The Insurance industry wants to become predictive. To achieve that, they need technology that can help them monitor the insured asset in real-time. Technologies like IoT and Telematics help insurance companies to gather valuable consumer data to mitigate risks. But with recent advancements, the same data will be used to make proactive decisions that will help the insurers and consumers to save a lot of money and find value in the offering that is provided.
IoT plays a vital role in your Digital Transformation journey that helps you allow a variety of devices to communicate with one another to execute a particular task. Telematics is a major part of IoT and it is a combination of “Telecommunication + Informatics” as the name signifies it helps to send, receive and collect enormous data in real–time with the help of sensors and other supporting devices.
Telematics plays a major role in monitoring both mobile and non-mobile assets. Based on the data the insurance carrier can understand what type of asset is important for the consumer. Each consumer is different and the importance of each of the assets varies based on their interest, usage, location requirements, and financial strength.
Today the insurer can provide a personalized insurance policy to the consumer and upsell to the existing policyholder based on the data that they receive from the telematics. Smart homes and Vehicles powered with telematics help the insurer to see how efficiently the property is being managed by the consumer and they can gain valuable insights directly into their Policy Administration System.
The insurer can get insights such as:
- Location data to identify risk in the vicinity
- Driving behavior of the policyholder to assess the probability of an accident
- Weather conditions and the impact on house
- Virtual home inspection to understand the house maintenance pattern
AI and Automation:
AI is already being used in several business processes and crucial aspects of Digital Transformation. Insurance giants are already focusing to scale it across all the business channels to make informed decisions. To achieve it, they need to collect data from structured and unstructured insurance documents such as policies, quotes, applications, underwriters, and claims.
They need to analyze all this internal data along with the external data that they received from telematics vendors like Zesty.ai to get a 360-degree view in order to make an informed decision without leaving anything to chance.
The capability to leverage internal and external data points helps the underwriters to accurately assess the risk and price the insurance policy in a customized way.
Secondly, delivering a contract takes time but the insurer can automate mundane procedures to speed up the delivery of contracts. It can happen by leveraging AI to identify repetitive tasks during the contract delivery process.
Based on the data analysis done by the AI, the insurance carriers can automate the monotonous tasks that a consumer has to go through.
Even the automation of policy renewal is possible by just comparing the new policy with the old ones, and also by comparing with other similar policyholders to come up with a pricing that is apt. It eliminates the need for manual scoring of documentation and helps to bring consistency to the process which is not the case with manual checks.
Similarly, the claims process can be automated, and moreover, detection of fraud becomes easy as they are so many data points that the system identifies a potential fraud case in a matter of a few seconds before passing the claims.
It eventually helps you to use your efficient workforce for more productive tasks like providing real-time advice and improving customer experience.
Relevant Read: Digital Transformation trends that impacts enterprise
Blockchain Technology:
Through its use of public ledger and its decentralized digital repository, Blockchain can verify the authenticity of the customers, and transactions by providing historical records. It has the potential to remove fraudulent transactions by recording every step of each transaction which makes the life of hackers difficult as the corruption of files becomes difficult.
One of the major problems is trust between the insurer and the customer. It can be solved by using Blockchain as it can handle third-party transactions for claims and could easily map the data with the original source. Based on the analysis, it can verify the authenticity of the claims and can automate the verification process within a few seconds.
This reduces administrative costs and helps the insurer to build a relationship of trust with their customer.
Digital Adoption Platform:
By now we understand the importance of data. Whether it is IoT, Blockchain, or AI, each of these technologies helps the insurer to get data and draw meaningful insights to make the right decision and enhance the customer experience.
A Digital Adoption Platform is used to make the enterprise software adoption process seamless and smooth. It guides the user from one step to another and helps them to accomplish their task. In short, it is the key to make your Digital transformation initiative a success.
A Digital Adoption Platform helps you to understand the behavior of the users and based on that you can easily segment the users. Contextual on-screen guidance and training content can be created for each user group based on the insights.
Another important aspect that it covers is process compliance. Since information is key and the way information is entered matters a lot, it would be ideal for organizations to use a tool that can help them achieve it. With a Digital Adoption Platform like Apty, you can ensure that your employees and customers follow the process flow and enter the data in an intended manner.
It not only helps the employees to use any web-based application effectively but also benefits you to get the right data in the right format.
Benefits of Digital Transformation in P&C Insurance
- A wide range of personalized offerings can be provided to customers as data can be gathered from telematics, IoT, and social networks. It empowers the P&C insurance companies to provide the customers with the customized offering at the right moment. This approach helps to improve the customer experience which leads to increased conversions.
- Enhanced customer support is the result of digital; transformation which helps the companies to stay ahead of their competition and serve their customers in the moment of need. They use chatbots to support their customers round the clock, generally, chatbots can answer can intuitively answer the customer’s queries as they are powered by AI and ML technologies.
- Smart IoT and telematics devices are helping companies keep track of their customers and measure the risk. Many applications help the insurance company analyze the efficiency of a driver and provide the appropriate quote to the customer.
- Predictive analytics platforms help insurers to know when a false claim is filed. To do this these platforms use all the data available in the public and private domain and then the AI helps them to identify the authenticity of the claim.
Wrapping it Up
Technology acts as a catalyst for the P&C insurance industry as it is changing the way business is being conducted. Whether you use telematics, AI, or DAP the ultimate aim is to make the job of your employees easy and customize the experience of your employees.
Leveraging state-of-the-art technology will not only help you overcome the hurdles of traditional ways, but also give you a massive competitive edge when used effectively.
*Source:- McKinsey
