Misconceptions about the cost and disruption of advanced technologies are holding insurers back.
The financial services industry is undergoing a colossal, tech-driven shift and the insurance sector is a significant part of this seismic movement. While adapting to this new landscape may seem like entering alien territory, there are ways to understand technologies like Artificial Intelligence, machine learning and Big Data better – and take advantage of their enormous potential.
Insurance – with its inherent reliance on data analytics – is perhaps more perfectly poised than any other industry for this change and its rewards. What’s more, the enormous benefits can be felt across the entire value chain. Carriers are beginning to utilize new technologies such as analytics, spatial data, drones and sensor technology to improve results. Underwriters have started consuming new technologies to enhance their risk selection and pricing; and, of course, insureds are using mobile apps to pay bills. For claims adjusters, it can mean greater efficiency and sharper analytics, while agents can track sales outcomes and leads with greater speed and accuracy. The list goes on.
To a certain degree, the insurance industry is already making huge efficiency gains by leveraging the power of these technologies. However, fears over expense, complications of merging with existing systems, and disruption to business are holding many insurance companies back.
Insurtech firms, once seen as a threat by many insurers, could help carriers release the profits locked in their data. Unencumbered by the legacy systems and traditional business models and mindsets, these agile firms are already building solutions that use insurance data to generate revenue. They are looking to improve the efficiency of insurers’ operations while others are opening new markets for carriers. Therefore, more and more carriers are partnering with insurtechs, like Intellect SEEC, to address key issues. By leveraging the power of AI, Big Data and IoT, Intellect SEEC is transforming the insurance industry. It knows, more than most, the importance of embracing innovation, to stay ahead of the game. And it understands that there is no need to replace your existing core system.
“With the interplay of a few different emerging technologies - The Internet of Things, Big Data, 5G, Augmented Reality – totally new use cases and interaction models will emerge,” says Pranav Pasricha, CEO of Intellect SEEC. He adds: “The financial landscape will become largely D2C or dis-intermediated, real time 24x7, highly peer-to-peer, and highly contextual. Products will be highly individualized on the fly to suit a customer’s unique needs.”
And when it comes to customers’ needs, insurance companies must take the plunge and leapfrog into the digital age. This is vital as the industry moves from a world of structured little data to a world of unstructured Big Data; from a world of fixed program rules, to endless learning with machine learning. To do this, insurance companies need to find ways to integrate their existing systems with newer technologies, without totally re-inventing the wheel. It’s about using simple technology to create sophisticated ‘mission critical’ insurance applications that are as easy to use as your smartphone.
“We have been working with carriers across the globe for over 2 decades, delivering value through core systems. We leverage next generation technologies to solve complex insurance problems to create intelligent solutions that deliver results,” said Pranav.
“We worked with a Midwestern Mutual that was suffering from lengthy policy issuance, submission errors, laborious manual processes – and most worryingly, lost business. It also wanted to reach middle markets for quick growth. We deployed a new direct channel with three new products, and within 5 months, the insurer was seeing huge benefits. Using advanced technology, we also vastly improved productivity of the underwriters, service employers and IT, and accelerated project timelines by a significant 30 per cent,” Pranav continued.
For all forward-thinking businesses, the power of these advanced technologies – and the reason they should be leveraged - is all about the end customer. This certainly rings true in the insurance sector. Tailored, personalized services and advice in turn promote an atmosphere of trust. Along with the end customer, agents also benefit. Time-consuming tasks can be automated, leaving people to focus on more advanced, skilled and nuanced jobs.
“The interaction of customers with financial institutions will only evolve more rapidly. With advances in Big Data and AI, financial institutions will be able to know and understand their customers better, appreciate their needs and give them much better contextual advice. They will be able to make customers understand complex products better, be more informed and self-service themselves. This eventually builds trust that the financial institution actually understands them and is acting in their best interests, Not the advisors,” according to Pranav Pasricha.
With all this in mind, the insurance sector – and the financial services sector as a whole - may soon be barely recognizable, thanks to the power of these advanced technologies. Those who are willing to embrace change will discover smart, super-charged and customer-centric business models. By changing philosophies first and foremost, and then supporting this mindset shift with new products, the insurance industry of the future will be powered by tech and driven by people.
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