Due to recent technological growth, all industries implement innovations, more or less. Digital tools, innovations, customer-first strategies – businesses now try to succeed by all means. The insurance market isn’t an exclusion. It faces the rise of InsurTech teams that rely on new technologies such as AI or blockchain. These innovations can help significantly, reducing costs, and improving client experience.
To get a clear market vision, let’s look at four essential insurance software trends for 2020. These technologies will be new standards, so pay close attention to them.
Forces that Shape the Insurance Market
We’ve already entered the era of sudden disruptive changes. The insurance industry feels them. A few significant forces are the most powerful, but they change regularly, too. To reveal the current points, ask prominent experts. Precisely, EY defines three major industry-shaping factors in insurance today:
- Stagnant growth. Low interest rates are one of the biggest insurance challenges. Clients show decreasing attention – they purchased fewer life policies in 2018 than in 2008. In Europe, non-life insurance CAGR remains at zero.
- Shifting demographics. In developed countries, the population is aging, birthrates decrease. In many African regions, the situation is the opposite. These contrast changes lead to market reshuffling that enables new risks and opportunities.
- New client expectations. Customers become more tech-savvy, so their needs change accordingly. People want to access the full insurance functionality via their phones, use self-service portals, find polished modern apps with perfect UI/UX.
Recently, the fourth force entered the game. COVID-19 and global lockdown are changing the insurance landscape rapidly. As the number of US unemployment claims exceeded 22 million, insurers face higher load. They have to process myriads of claims, distinguish fraudulent ones, maintain liquidity. Some companies are denying claims and confront financial watchdogs. Others try to ride the wave, offering coronavirus insurance policies.
Four Major Trends for 2020
Considering the rising challenges, underwriters should look for new opportunities, too. Advanced technologies can help a lot in this case. They cut costs, optimize delivery, improve communication, and automate workflows. Nonetheless, it’s critical to understand trends to implement technologies correctly. Check them right here!
1. Artificial Intelligence
This point relies on data heavily. Artificial intelligence, paired with machine learning and data science, processes large sets of information to optimize various tasks. For instance, AI tools automate policy management, improve claims analysis, enable anti-fraud algorithms, analyze customer demands, and help to deliver the most personalized offers.
Being one of the most controversial technologies, blockchain is often associated with cryptocurrencies. However, this concept goes far beyond. It’s a distributed and immutable ledger. Hence, blockchain insurance can eliminate fraud completely by offering trustless verification solutions. This tech also improves risk mitigation and processing speed.
Cloud technologies are pretty familiar to many businesses. In 2020, they are on the rise due to a large-scale switch to remote collaboration. For insurers, cloud solutions can optimize efficiency because companies with cloud services don’t have to maintain their own IT infrastructure. High flexibility with nearly infinite scalability is another advantage of clouds.
4. Internet of Things
The idea of IoT is pretty simple but powerful. It provides for the network of connected devices that collect information, exchange it, and send it to processing units. Based on these interactions, IoT gadgets can empower all industries. For insurers, they help to understand customers better, analyze demand, spot trends.
Among the available IoT developments, we can define a few prominent concepts for the insurance industry:
- Home gadgets. From smart doors and lightbulbs to intelligent fridges, IoT home devices gather various info. Underwriters can use it to analyze claims or deliver more client-focused policies based on the level of risk.
- Telematics. These things are often installed in different vehicles, especially cars. They help to understand how a person drives, analyze personal risks. As a result, insurers also deliver more personalized offers.
- Wearables. These gadgets work similarly to car sensors but for humans. Smartwatches or fitness trackers can collect health data that is critical for life insurers. As a result, companies also can tune their offers depending on data collected.
Insurance in Time of Coronavirus
Honestly, we even can’t predict how the insurance industry will develop over time. Current circumstances change the global landscape nearly every day. Still, we think that insurance companies should opt for effective innovative technologies. They can save businesses thanks to optimized processes and reduced costs. The only thing you should remember about is wisdom. Be sure that you really need innovations and know how to implement them. Good luck!