March at The Fintech Times is all about insurtech and its many facets. With the industry making leaps and bounds over the past few years, insurtechs are providing the much-needed disruption of the traditionally viewed, and sometimes outdated insurance industry. From innovations in technology and applications to key industries like property, auto and energy, this month we’ll be taking a look at some of the key topics in the sector and how insurance really is the one to watch.
With this in mind, we have spoken to some of the leading players in the industry to discover what some of the major insurtech technological innovations have been recently and how it has impacted the insurance market.
Data and analytics
Shahin Hatamian, senior vice president of product management at Mitchell, believes the use of data and analytics have seen major innovation in the industry.
“By recognising the value of looking at the claim holistically and using data and analytics every step of the way, insurance companies can start to improve customer outcomes, ultimately paving a better path to quickly restoring people’s lives. By incorporating a variety of data and insightful guidance, an adjuster is more prepared to make thoughtful, data-driven, defensible decisions throughout each stage of the claim.
“Automation is one tool to improve customer relationships by helping provide better responsiveness, more consistency in decision-making and faster time to payment. Processes that are traditionally manual can now be automated, including document ingestion, workflow, decision-making and payments. Insurers and other payers are also investing in analytics that can help identify fraud. Our future includes a world where certain claims could be processed in seconds. It’s a win-win for both customers and insurers.”
Data is the key differentiator
EvolutionIQ CEO, Tom Vykruta, agrees.He said: “The largest web 2.0 companies including Google, Facebook and Amazon have achieved scale not through technology, but through data. Data is the key differentiator from web 1.0. Technology determines how much of the data the organisations can utilise, and how it’s used. To achieve web 2.0 scale, leaders must invest in technologies that utilise the full historical data set, and reason about the future, not simply summarise the past. Insurtechs are now starting to utilise Google-scale AI to unlock the vast data that the insurance industry has amassed.
“This data revolution will continue to be a significant arena of competitive differentiation for claims organisations, and it’s inevitable that in the next 5-10 years the industry will adopt this as the go-forward methodology.
“The once-crisp line between our digital and physical worlds has already collapsed.”
Ron Skrocki, senior vice president, product management and development, Genex Services, believes predictive analytics are crucial
“Another vital data decision-making tool in the P&C industry is predictive analytics, where each claim is assigned a score based on several elements.
“Scoring cases represents an increasingly sophisticated marriage of data science — with artificial intelligence and predictive models — and the “heart” of case managers, who use expertise and empathy to assist injured workers on their return-to-work journey. Cases are assessed and categorised on a scale from “low” to “extreme” risk. Data elements include cause of injury, jurisdiction, body part, individual’s age, preexisting conditions and psychosocial factors. The score attempts to predict what will happen with the claim, length of treatment, need for case management intervention and total cost.
“Customers and insurers really want the same thing —claims paid quickly and fairly. An insurer can leverage vast data stores to help guide claims professionals and customers resulting in both efficiency and consistency.”
Rudi Steyn, Chief Technology Officer at CoTé Software & Solutions said:
“What we are seeing evolve in the insurance sector is a need to build trust with their customers at an accelerating speed. Customers now expect a smart, transparent, and reliable insurance service to protect themselves and their assets – if there is no trust, customers seek service elsewhere. Therefore, we focus on performance-meeting cloud applications that offers trust, transparency, security, automation, and high customer engagement to increase value to insurance companies. These include capabilities that offer automated business workflow and real-time customer communications and intelligent policy management checklists for insurance professionals to ensure thorough speed of service; compliance needs; and complete data security. This is even more vital in today’s remote work environment.”
He continued: “All these improvements enable insurance companies to be more proactive, deliver better customer service and compete better against other firms. When insurance carriers and insurance agencies do not have to do reactive work or handle administrative tasks that can be anticipated and automated, they can redeploy that time for high-value activities to find more customers, launch new products, improve customer loyalty, and proactively manage market and regulatory demands. Customers are happier and more loyal to their insurers and agencies when they’re thinking ahead on their behalf, on top of all the details of their policies and providing guidance along the way.
“Digital tools are changing the game for insurance carriers and agencies, enabling these companies to better serve clients and equipping their employees to succeed. Their long-term success depends as much as anything on how well they procure and integrate these technologies.”
Efrat Sagi-Ofir, Founder, Air Doctor, believes digitisation has been key.
She said: “Even though the pandemic pushed all companies to add more digital solutions,” he said, “at the end of the day, traditional industries like insurance have always needed to digitise on some level to add more value to their customer base – whether it directly improves customer experiences or just streamlines internal processes and indirectly attributes to that. Thankfully technological advancement has allowed this digitisation to happen both instantaneously and seamlessly.
“APIs for instance, add a lot of value and really push innovation to the forefront. Today we have such a vast scene of how API-based technology benefits the insurance industry and InsurTechs alike. From public APIs, which allow prospective policyholders to compare policy features and prices, to APIs that streamline data sharing and enable companies to access better insights and analytics. Not to mention integration capabilities that equip insurers and startups with the technology to provide customers a highly personalised service, and even partner onboarding, which simplifies the process of bringing more partners on board and can also be an excellent way to increase revenue streams.
“APIs have significantly changed how insurers add value to their products and services and has allowed the industry as a whole to expand its reach through this innovation. Even InsurTech startups, like Air Doctor, can easily connect to potential insurance partners and other companies, since these companies end up spending a lot less money and resources integrating new solutions, ultimately giving them the ability to try new things and setting them up for success.”
Gerritt Graham is Executive Vice President of Growth Strategy for Kinetic Insurance, commented: “Technology first allowed insurtechs to provide a more accessible consumer experience.Then, technologies like AI and predictive analytics leveraged data to create more efficient and cost-effective insurance business solutions. More recently, we’ve seen a move into consumer-facing insurance applications with technology like telematics collecting data and monitoring behavior to assist in risk assessment, and wearables that can actually change behavior and prevent or reduce risk.
“This current shift from just risk transfer to tech-enabled risk prevention is the future of insurtech, as it holds real value for all parties – the carriers, the brokers and the policyholders. Carriers can experience notably higher profits by reducing loss, policyholders reduce losses and in turn costs, and brokers offering tech-driven, proactive products can win more business by standing out in a crowded marketplace and becoming true loss-prevention partners.
“As insurtechs begin to focus more on loss ratios, a greater focus is being placed on technologies that can actually accomplish real-time loss prevention. IoT devices, such as wearables, can provide real-time feedback never before available to help reduce loss, as well as valuable data insights that can potentially predict and prevent risks. And as this connected tech continues to evolve with greater usability, connectivity and capabilities, the applications for insurtech will continue to grow as well.”