PEW Research statistics indicate that there are more adult millennials than Baby Boomers, which directly affects the insurance consumer demographic.
Since millennials, currently ages 23-38, spend more money than any other generation, businesses are pushed to adapt to the needs of millennials to satisfy demand.
In this evolving digital age, many businesses find themselves in a position where they have to ‘adapt or die’ and like these businesses, the insurance industry is adapting to changes in consumer demands.
Insurance tech, or simply InsurTech/InsureTech, is the mark of change that the insurance industry is going through.
Such disruptive change comes with a lot of questions and uncertainties for investors, brokers, and independent insurance agency owners making technology investment decisions.
Although pursuing InsurTech trends is the correct path for the insurance industry, one can’t help but wonder what influence the current insurance tech trends will have on the future of insurance.
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Big data analytics
Big data analytics enables the collection, processing, and analysis of more detailed and actionable information from the customers, which allows for highly personalized services.
Unlike other demographics, millennials want their services to cater to their specific needs and they don’t want to pay for the services that they don’t need.
For instance, instead of going for all-encompassing insurance options such as comprehensive car insurance, millennials would rather go for usage-based insurance such as pay-per-mile car insurance.
Big data analytics will provide the means for the insurance industry to provide more personalized product options to clients in the future.
Additionally, there will be a significant improvement in claims processing especially in subrogation, claims settlement, litigation, and elimination of fraud.
Unfortunately, it is impossible to discuss a future where big data is involved and not to mention the implications on privacy.
The future of internet privacy is bleak when big data comes into play because, at the end of the day, there are no ways or policies in place to protect the data that is collected from the consumers.
New internet privacy laws have already begun emerging such as the recent GDPR requirements in the EU.
The Internet of Things (IoT)
Smart homes, smartwatches, and even connected cars are prime examples of the IoT and they all represent the future for InsurTech.
The IoT enables insurance companies to collect comprehensive data that can then be used in big data analytics.
The IoT is useful in risk management and the verification of claims and simplification of claims processing and its applications are boundless.
For instance, thanks to biometrics from wearable devices, insurers can monitor the health of their at-risk customers and call medical services in case of emergencies.
For the future of insurance, IoT represents both hope and despair.
Where hope is concerned, the IoT can prove very useful to both the insurers and customers by simplifying claims processing and increasing accountability between both parties.
For instance, it could eliminate third-party involvement in claims processing, which can reduce fraud in the insurance industry.
Where despair is concerned, the IoT presents a serious threat to privacy for the consumer. The threat lies in the amount and sensitivity of data collected and the fact that there has yet to be improvements in security in the IoT.
Take, for instance, the Strava global heat map which revealed the location of users in some military bases and other secure locations around the world.
Unless the security risks of the IoT are addressed, the future of InsurTech will remain bleak.
Artificial intelligence (AI)
AI provides the means to handle resource-consuming tasks such as claims processing in a fast, accurate and unbiased manner without placing a burden on either the insurers or the clients.
The most significant selling point for AI in the insurance industry is the elimination of human involvement, which eliminates the risk of human error.
In the future, thanks to the inclusion of AI in more aspects of the industry, there is bound to be increased distribution of insurance.
Many insurance processes, such as automated underwriting, will be faster and more credible, which will increase the trust in the industry.
Of course, there will also be more advanced applications of AI in InsurTech.
For instance, there will be a significant advancement in cognitive technologies such as machine learning, computer vision, and speech recognition.
The cognitive technologies will become essential in the processing of big data particularly because of the ability of such tech to adapt and evolve with increased usage.
Checkout our Infographic sharing the top 11 InsurTech trends to watch in 2019.
We have Bitcoin to thank for the popularity of blockchain. The application of blockchain to the insurance industry plays a major role in eliminating many of the problems plaguing the industry.
For instance, one of the benefits of blockchain lies in data management, which is an issue that the traditional insurance industry has had to deal with for ages.
With the blockchain in place, most of the checks and rechecks that would have to be carried out and the subsequent human errors are eliminated since all the data is organized automatically in a seamless ledger.
Aside from data management, there is also a security issue. The blockchain is not only hack-proof but also tamper-proof, which eliminates fraud and guarantees the security and privacy of the information.
Since most other insurance technologies pose a threat to internet privacy, you can understand just how important blockchain is to the insurance industry.
The security and privacy provided by blockchain will be one of the major reasons for the increased adoption of the same in the future of insurance.
Industries from trucking to digital advertising are becoming more automated each year.
The insurance industry is no different. Each stage of the value chain is becoming more automated each year.
When we say, “adapt or die”, we literally mean that for insurance agents. Automation technology in marketing, sales, and service is enabling small, medium, and large insurance companies to reduce staff.
If you own an independent insurance agency then you should be looking into ways to automate your marketing, sales, and service processes to save you time and improve your customer experience.
A few of these 50 Marketing Automation Services might be worth looking into.
Customers continue to prefer more digital engagement year after year but their expectations for quality also increase.
This means that consumers expect their digital experiences to be personalized as much as possible.
The more you can personalize an experience for your prospects and policyholders, the better the customer experience.
New technologies help collect personal data and use it in website and other marketing content to personalize the customer journey and increase conversions and satisfaction.
You should be looking into ways to make your service more personal for your customers.
Should you invest in InsurTech now?
Since InsurTech provides such great benefits and has such a bright future, should you invest now or wait?
As an insurance professional, the correct decision would be to invest early. However, you have to keep up with the changes in the industry and continue adopting the latest InsurTech as it is rolled out or you will become less competitive in the marketplace.
As a customer, on the other hand, naturally many millennials will choose InsurTech options while Gen X and Baby Boomers may choose to wait until the industry stabilizes with a few giant players to choose from. Over 250,000 consumers have already chosen Lemonade, one InsurTech giant.
InsurTech, as it is at the moment, is receiving over $2 Billion per year in investment and is quickly stabilizing.
This means that there are many InsurTech solutions coming to market making it difficult for independent insurance agencies to know which solutions to invest in.
Which is why Leadsurance is the perfect InsurTech investment for independent insurance agencies and the perfect product for policy holders in 2019.
Our technology is hosted on an SSL secure server with the industry-leading firewall protection making policyholder data completely secure.
For insurance agencies, our solution is efficiently improving customer service offering automated and personalized customer engagement, service, and instant quoting 24/7.
Using automation, AI, and a dedicated team of marketing professionals your insurance agency will get more leads in less time with Leadsurance.