As with all developing fintech, the world of insurtech is constantly bringing forth innovations to assist both policyholders and insurers. This is due in part to the work numerous insurtech startups and huge insurance companies have been doing to provide insurance products in creative and efficient methods. Indeed, fintech expert Jackson Mueller reports that at least 1,500 insurtech startups have popped up all over the globe to offer their services, with almost $9 billion in insurtech capital invested in the past five years alone.
This marks an exciting time for insurance technology, and if you’re interested in seeing what this year holds for insurtech, then keep reading.
Using artificial intelligence (AI) to expedite claims processing
When it comes to claims processing, the amount of paperwork and approvals involved often slows down the clearing process. And you can be sure that all policyholders have been affected by this. While this concern is often raised more by those whose claims have been denied, even successful claimants have had problems with the unnervingly long payment delays and huge amounts of required paperwork.
But through insurtech, insurers can now use AI and machine learning to speed up claims processing. While the use of AI in claims processing is not exactly new tech, expect more and more insurance companies to adopt this technological approach in the future. In fact, New York-based insurer Lemonade has been integrating machine learning techniques with chatbots for faster claims processing. Through their app, policyholders can start to begin their claims process by explaining their situation to a chatbot. After that, the application uses AI to search and match the claims description in their database while simultaneously checking if the claim is fraudulent. Once the bot has ruled that the claim is legitimate, the app can permit and close the claim right then and there. Otherwise, it notifies a customer service representative to take over the process.
Blockchain tech integration
There’s a ton of ways blockchain tech is being used in the insurtech world, but a more prominent example of this technology at work can be seen in smart contracts. Legal expert Mick Atton describes smart contracts as self-renewing contracts, which are made possible by blockchain technology. Law firms use them to automate and virtually enforce what’s mentioned in a legally bound agreement, but smart contracts aren’t limited to the legal industry. For insurance companies, smart contracts can improve the customer experience and cut the time it takes to verify claims and compute premiums — and, it does all of this with impressive efficiency.
The main reason why this is possible is because the blockchain holds a fully organized and immutable history of transactions, which it monitors as time passes by. Despite the limited use of smart contracts due to insurers who are wary of blockchain tech, those who see the potential of smart contracts should expect more growth in policyholders and revenues in the year ahead.
Smarter data collection
These days, you’ll often hear people saying that data is the new oil. This also holds true for insurtech, since analyzing key data trends brings to light the problems that need corresponding solutions. Salt Lake City-based company InsuraGuest has dipped their toes in data collection and analysis by creating partnerships with hospitality and hotel establishments to determine nuanced problems in the properties General Liability coverages and subsequently use the data to craft a solution to cover the gaps in those polices. Other than widening the reach of their services, the data discoveries from InsuraGuest’s partners allowed InsuraGuest to create a specialized Hospitality Liability solution for the property owners and managers. The Hospitality Liability coverages, which were created specifically for InsuraGuest member properties, adds a layer of protection for the property on a primary basis, should a guest experience an accident or theft while staying at the InsuraGuest member property.
However, through the IoT, data collection isn’t only limited to insurer-client partnerships. These days, the data from wearable tech, smart cars, and even smart home devices can be pooled and analyzed by insurtech companies. This makes it possible for insurtech companies to create a more accurate predictive model to better service their clients.
Overall, this year holds a lot of exciting insurtech trends — which is unsurprising, since fintech is known as a rapidly innovating industry. So, both policyholders and insurers should expect these key trends to come their way before the year ends.
Article exclusively for insuraguest.com
Prepared by Halle Edison