Let's face it, the insurance industry has historically lagged behind in terms of innovative, emerging technology use. Much of the blame goes to the staunch regulations insurers and underwriters must observe. But insurance and technology expert Xavier Mutzig recently made waves by arguing that "insurance hasn't evolved since the Industrial Revolution."
The comment struck a chord with many organizations, and a number of insurance institutions are looking to shore up technological gaps to improve experiences for their agents and clients.
Recent improvements for efficiency, pricing and fraud prevention
According to Insly contributor Triinu Murumae, more insurance companies than ever before are updating their legacy systems with more efficient and consumer-focused platforms, including the cloud and automation. This elimination of time-consuming, manual processes, alongside the ability to reduce complexity of on-site IT platforms, has enabled insurers to considerably streamline workflows and provide improved experiences for consumer- and business-level clients.
In addition, access to more integrated and expansive data sets is helping agents more quickly glean insights for processing claims and pricing. Big data analytics and telemetrics obtained from consumer devices and sensors, in particular, have become powerful assets for forward-looking insurance firms.
When insurance companies implement technology that enables multiple-channel interaction, customers find their overall experience enhanced and many of their processes made more efficient.
Big data analysis has also become a critical tool for improving fraud prevention efforts. One study found that 35 percent of individuals deem it acceptable to alter or fabricate information included on insurance forms, viewing it as a "victimless crime." At the same time, though, the FBI discovered that this kind of fraud costs the typical American family up to $700 each year. In this realm, the ability to access and analyze critical data points in order to pinpoint potential cases of fraud has proven essential.
What's on the horizon for insurtech?
Now that more insurers are embracing cloud systems and more advanced strategies, including data analysis and automation, the "insurtech" sector will continue to grow.
"Having experienced a brief honeymoon period of excitement and interest in all things insurtech, the space will mature in 2018 as hard questions start to be asked around traction, value and longevity," noted Digital Insurance contributor Jamie Macgregor.
In the coming months and years, insurance firms will focus their technology investments around solutions that can help boost efficiency, as well as those that can bolster data privacy. With new and additional regulations coming into play, including the critical General Data Protection Regulation in the European Union, insurers must be sure that their use of consumer data is secure, yet transparent.
In addition, experts predict that while insurers tended to gravitate toward off-the-shelf technology systems in the past, companies now seek out more tailored and customizable solutions - whether employees work in a central office or, increasingly, need remote support.