It's certainly an exciting and changing time in the insurance industry. Like other sectors in financial services, insurance is undergoing a significant digital transformation. New technology is helping remake the customer experience, as consumers demand quotes generated quickly and digitally, speed, variety and ease-of-use when interacting with insurers.
Meanwhile, innovative software is also helping streamline the back-end systems for insurance companies and brokers, helping reduce paper-based processes, enhance automation and streamline workflow.
With that in mind, here are some of the hot insurance technolgoy topics to keep an eye out in 2019.
AI technology is all the rage today, but it’s not just about telling Alexa to reorder you toilet paper. AI technology is also changing the way insurance is delivered and managed as well. In particular, it relates to the general explosion of data and insurers making sense of that to know clients better. This is already starting, as some insurers are already using wearables to give customers a wide range of benefits.
And this trend will only grow. According to a recent McKinsey report, the resulting avalanche of new data created by wearables, smartphones, personal assistants and other connected devices devices will allow carriers to understand their clients more deeply, resulting in new product categories, more personalized pricing, and increasingly real-time service delivery.
“For example” the report further states, “a wearable that is connected to an actuarial database could calculate a consumer’s personal risk score based on daily activities as well as the probability and severity of potential events.”
More money from both venture capital and institutional firms continues to flow into the insuretech sector. And much of that action is happening right here in the U.S. The World Bank reports that More than half of the global $2.3 billion in insuretech funding in 2017 went to the U.S. and the U.K.
In fact, during May of this year, investment in insuretech even exceeded that of blockchain and B2B fintech, with 22 deals worth a reported $23 million in value. It’s clear that money flowing into the insurance technology sector is not even holding steady, but rather increasing.
A large aspect of this boom is the desire for insurance firms to attract and maintain millennials as customers. Like their counterparts in banking and investing, insurers have made it a priority to reach this demographic, one that typically likes to conduct most transactions on their smartphone, and wants products and services delivered quickly and digitally.
Don’t forget about brokers
While much of the media coverage about insuretech tends to focus on what the insurers themselves are doing in the realm of innovation, insurance brokers as well are being affected by these sea changes. But rather than being wary of change, insurance brokers should in fact embrace innovation to remain relevant in the future.
As one report noted, “digital transformation strengthens an independent broker’s core value as a trusted advisor and ensures longevity via a more competitive and sustainable position in the marketplace. Specifically, digitally transformed businesses stand to reap rewards related to customer retention, employee retention and return on investment.”
No matter what business you are in, today’s customer demands a seamless, digital experience, and it’s no different for independent insurance brokers. It’s why insuretech will continue to be a critical part of their business going forward.
Give the customer what they want
Ultimately – whether you are selling groceries, books, shoes, or insurance – it all boils down to meeting consumer expectations. Today, consumers are used to everything being on-demand, and dealing with companies that interact with them in real time. It’s why the insuretech space will continue to boom and trends will be followed closely by the industry.