Insurance Technology: What Insurance Agents Need to Know in 2021

Relationships between insurance companies and people are evolving. Insurance technology (or InsurTech) is helping revamp the industry and give control to clients. Toggle shows this by offering flexible insurance products. Allowing clients to choose the coverage they want, how long and when they want it.

The demand for customized digital experiences is increasing. The next wave of technological adaptation will bring drastic changes in digital need. Moreover, it will allow people and businesses to make digital choices. This will inform clients about their experiences.   

InsurTech can be daunting but there are many ways to help solve your business problems. Read ahead to see how insurance agents use InsurTech to maximize your businesses’ potential. 

In this blog

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CRM to digitize your client database

Using InsurTech like CRM is one of the most valuable things you can do. A CRM system allows you to digitally store all of your customer data. Such as policy information, documents, notes, reminders and copies of emails. The system lets you search and access a client’s information, or scan and digitalize all their paperwork for instant access.  

Some agents might want to rely on files and folders. Claiming it’s cheaper and easier, but what if a client calls and you’re not at your office? CRM solves this problem by allowing agents to access information whenever and wherever. These systems help you quickly communicate and show your agency is efficient and responsive. 

CRM InsurTech helps create more sales by creating unique individual interactions with clients. Moreover, CRM improves your workflow by being able to track clients through every stage of the sales process. Therefore, every preference, question, and service request is automatically available. In conclusion, it enables agents to personalize every interaction, track data better, and have more opportunities to cross sell.

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Reimagining InsurTech through AI

One technology in insurance is artificial Intelligence (AI) which is designed to mimic human intelligence. Specifically in terms of decision making, and reasoning. There has been concerns regarding AI replacing human tasks. However, research now highlights the prospects of AI and human collaboration.

Accenture reports that 79% of insurance executives believe collaboration between humans and machines. It highlights that will be critical to innovation in the future. When AI becomes a bigger part of insurance, it will benefit the industry. The benefits will be in areas of claims, underwriting and customer service. For example, virtual assistants and chatbots is made possible by AI. This can help solve many basic customer issues without human involvement.  

Insurance agencies are quickly adopting AI tools. This helps to speed up the time it takes to complete basic tasks through automation. AI allows insurance agents the ability to create unique experiences for each client. Furthermore, it also helps to meet the high speed demands of today’s clients. Therefore, customer experience is the root of digital transformation.

According to Forbes, there are opportunities to utilize the data for machine learning and AI. Whereas, the data can improve everyday experiences for customers. With AI in place, clients are able to mix and match their coverages, how they want and when they want it, giving them the experience that is truly designed for them.   

Many insurance companies are adopting AI and have acclimated to fast and accurate service. For instance, Deloitte covered one property and casualty peer-to-peer insurance company that uses AI-powered claims analysis. In conclusion, AI will increase decision making capabilities and accurate risk and fraud predictions.

Integration of AI in insurance technology means:

  • Improved converting prospects to customers,
  • Refined risk assessment and risk-based pricing,
  • Enhanced claims adjustment, and more.

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Blockchain: The next step in insurance technology

Blockchain technology helps insurance companies to overcome complex challenges such as fraudulent claims, third party payment transactions and handling big data. For instance, Bitcoin is one of the most popular examples of blockchain technology. According to a report done at UC Berkeley, blockchain also helps to enable a multibillion-dollar global market of anonymous transactions.   

Blockchain is not the solution to all of an agent’s problems. However, it does provide core technology that promotes transparency, trust and stability. Though it is only in its initial phases, insurers are leveraging this technology to mitigate many challenges. Such as:

  • Its decentralized digital storage can help agents verify fake clients, policies, and transactions by providing past records.
  • Blockchain can manage, share, and monetize vast amounts of data.
  • Can handle a large number of third-party transactions and claims.
  • Helps reduce administrative costs through verified payments from third parties.
  • Blockchain mitigates exposures to specific risks.

Big Data: Analyze, improvise, adapt!

Big data is a wing of technology that provides a range of solutions. Including solutions that understand, analyze and process large lumps of data. In InsurTech, it refers to structured and unstructured data. Structured data refers to defined tables and fields. Unstructured data refers to social media, typed reports and recorded interviews. 

The rise of big data has been catering to a large range of data process applications. For instance, some of the top insurance companies like State Farm collects data on customers’ driving behavior. This is done through a mobile app and in-vehicle OnStar systems for its Drive Safe and Save Program. Through this, clients earn an automatic discount on enrolling and receive further discounts according to their driving habits. 

Tools and software products like these which are based out of big data, are slowly transforming the InsurTech industry. Big data is an opportunity for insurance sectors like P&C and Life to optimize their business models. According to SNS Telecom & IT, insurance companies invested $2.4 billion in big data technologies. Furthermore, investments are expected to increase to $3.6 billion by 2021. 

Big data in insurance technology will help to:

  • Enrich customer experience by using insights from data and resolving issues.
  • Improve marketing effectiveness and tailor products to individual preferences.
  • Help reduce fraud through identification techniques. According to the Coalition Against Insurance Fraud, each year US insurance companies lose more than $80 billion due to fraud.
  • Facilitate claims processing by using machine learning algorithms to outcomes.
  • Determine various price models that will ensure profit for the client’s budget.
  • Increase efficiency by creating targeted marketing companies that will help to gain new clients.
  • Accurately underwrite, price risk and improve risk reduction. For instance, Telematics allows insurers to collect real-time driver behavior data.

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Machine Learning (ML): Rise of the neural networks

Forbes states that, “Machine learning is technically a branch of AI, but it’s more specific. It is based on the idea that we can build machines to process data and learn on their own, without our constant supervision.”   

The possibility of what machine learning can do seems endless. In simple words, machine learning is the science and engineering of making machines “learn.” Also, the insurance industry is undergoing a digital transformational to increase operational efficiency, boost client service and detect fraud. Some ways machine learning is transforming the insurance industry are:   

  • Some of these claims do not require human aid. Therefore, machine learning can improve the claims process by automatically moving it through the system.
  • From the starting report to analysis and contacting the client, ML makes it all smooth and efficient.    
  • Machine learning offers agents new methods and tools. It will help agents classify risks and calculate more predictive pricing models that also reduce costs.   
  • It helps to speed up the underwriting and reduce premiums leakage by filling in missing or incorrect information.   
  • Insurance agents can create better personalized services for their clients with the help of advanced analytics.    

Telematics: Smart devices for the smart insureds

Telematic devices is one of the smartest ways that customers are using technology to shift their risk and save money. A telematics device is a system that can be installed in your client’s car.

It helps to monitor and report on their driving habits, speed, the number of miles driven etc. Moreover, insurance agents and companies can use this information to determine risk factors and adjust insurance premiums accordingly. Additionally, it can help your client may even receive a discount on their premiums.  

Insurance companies such as Progressive offers Snapshot; State Farm offers Drive Safe and Save; and Nationwide offers SmartRide. Therefore, telematics not only supports pricing but also claim management and payments. They also help insurance agents to develop personalized offers and nurture client relationships. 

Final word: Insurance technology is here to stay   

A digital revolution is creating massive disruption across many industries, and insurance companies are no exception. Even though insurance companies are familiar with data, it only makes financial sense that they implement these major technological trends. This will give them an in-depth look at their companies to uncover new insights.    

From fraud detection to developing algorithms to determine the best pricing strategies. Using technology will make life easier and work more efficient. Given that, agents will only benefit if they opt for a technology solution to automate their work and outreach. Additionally, it will also evolve insurance careers for the future.

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