The insurance industry is undergoing rapid technological developments thanks to the rise of insurtech. Businesses are looking for ways to innovate their internal operations and maintain their position atop the industry. As mass digitization continues to reshape client expectations, insurance companies must stay ahead of insurtech trends this year to remain competitive.
Experts predict that the insurtech market size will increase by 51% from 2022 to 2030. With so much growth potential, it’s only a matter of time before the insurance industry fully transitions to technology-enhanced processes. This article will discuss the top insurtech trends that will dramatically impact the industry and determine the future of insurance experiences.
1. Cloud computing
Insurance companies process massive amounts of client data, which can prove challenging when done through local servers. Speed and efficiency matter because the faster a company can process information, the more work it can achieve. Downtime-related costs can also significantly hamper business operations, which you can avoid by harnessing the power of the cloud.
Different companies have unique IT needs. With cloud computing, enterprises can use software processing to scale their business up or down, depending on business demands. Regardless of company size, the ability to grow your business seamlessly and efficiently will determine its success in a technologically driven world.
2. Rapid digitization
In light of the global pandemic, the insurance industry maintained a steadfast approach to digitization. Document verification, telemedicine, and online policy purchases became the norm as client expectations continued to shift. What was once a temporary solution becomes a permanent adaptation that aims to enhance the client experience altogether.
As the insurance industry continues to embrace modern technology, companies can offer insurance products that are tailor-made to client requirements.
One feature that customers are increasingly looking for in insurance is hyper-personalization. If your company can offer customizable insurance covers for an affordable price, you can expect to draw more attention to your services than your competitors.
A common misconception within the industry is that insurance is a one-size-fits-all solution. But the idea is far from the truth, as people have unique insurance needs that companies should strongly consider. For example, roadside assistance, engine protection, and zero depreciation cover are some of the add-ons people look for in their car insurance.
Segregating users and providing insurance packages specific to their requirements is more vital now than ever.
4. Cloud storage solutions
The insurance industry has long resisted adopting the latest tech trends. However, with technology making significant progress in every industry, insurers are starting to realize the potential of these modern advancements.
Cloud storage is a prime example. By transitioning to the cloud, insurers can store, access, and organize their files more safely and efficiently. The upgrade allows insurers to provide personalized insurance products and experiences faster than legacy storage. Cloud storage solutions also boost the efficiency of an insurance company’s internal operations. Thanks to cloud storage’s immense storage and mining capacities, businesses won’t need to plan for plan hardware or software infrastructures.
The younger generation is quick to question the insurance industry’s stiff nature since they want flexible solutions. Thus, it makes perfect sense for companies to build their architecture on microservices since it allows for up-and-down scaling without incurring additional costs. Companies can reach a wider market and extend protection with a user-friendly approach that doesn’t break the wallet.
Microinsurance has been gaining traction over the past few years as they promote accessibility and affordability to the masses. By using advanced technologies to collect and analyze data, insurers can provide value-based plans that the future generation will come to appreciate.
6. Alternate payment methods
As consumer expectations evolve, so does our financial ecosystem. Clients nowadays expect companies to offer flexible payment solutions for convenience and ease of use. Often, companies fail to consider payments as a key cog in the client experience, thus leading to friction on the client’s end.
It would be wise for insurance companies to offer flexible payment solutions. Businesses can get paid faster, eliminate the risk of bad debt, and improve cash flow which, in turn, can lead to greater scalability potential.
Using the right insurance billing software can make a massive difference in helping to reshape the client experience. By offering credit card and ACH payments, clients can take advantage of the convenience and pay their insurance bills in the comfort of their homes.
7. Software tools
Many insurance clients are noticing the traditional insurance claim process hasn’t changed in decades. Processing paperwork takes time, and the weeks-long duration isn’t a forward-thinking solution.
Thankfully, many software tools are available to insurers that help them make data-driven decisions and navigate the claims process more quickly. The insurance industry is fast-paced, and those who use modern software tools can streamline their processes and maximize employee productivity.
Chatbots play a huge role in helping insurance companies secure leads and provide exceptional customer service. These programs have 24/7 uptime and can generate responses in a matter of seconds, thus saving companies time and resources from having to employ a dedicated staff.
Chatbots can be as simple as rule-based programs that work on a tree-like flow to resolve a client’s question. Other advanced programs like AI chatbots use machine learning to generate human-like responses and facilitate a more natural conversation.
Blockchain is slowly establishing its roots within the insurance industry, bringing forth plenty of advantages that companies will find appealing. Blockchain is a data structure that allows businesses to create a digital ledger of transactions and share them through linked computer networks.
Insurance companies store large amounts of information, and blockchain allows them to transfer and share information easily. Blockchain also facilitates using smart contracts, a digitally signed document that self-executes when it meets predetermined conditions.
Smart contracts promote transparency, as participants have access to the same information. Since the documents reside in blockchain, contracts cannot be altered, thus eliminating the possibility of contract manipulation.
10. Telematics insurance
Telematics insurance (also known as usage-based insurance) is making waves across the insurance industry for a good reason. It works by monitoring a client’s driving behavior thru an app, allowing the company to track data such as speed, braking, acceleration, and more.
The main benefit of telematics insurance is that it helps insurers estimate accident damages more accurately, thus eliminating the risk of fraud. Clients also benefit from telematics insurance as it helps lower premiums for safe/low-risk drivers.
If insurance companies wish to keep up with evolving client expectations, having strong telematics is an ideal solution.
While the insurance industry is slowly adopting insurtech trends, the uncertainty brought by the pandemic sped up the process immensely. Customers have grown accustomed to the convenience and simplicity of insurtech, and the expectations going forward will be much higher.
As insurtech trends mature, companies should look for ways to adopt these innovations to enhance the client experience. Staying abreast of the latest advancements is crucial to maintaining relevance and competitiveness, and hopefully, this article enlightens you on the top insurtech solutions in 2022.
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