As 2019 closes, it is becoming more and more evident that investing in more advanced technology is perhaps the most important way to invest in the future of a business. As the role of insurance carriers, third-party vendors, and customers keep evolving it is more critical than ever to understand just how massive an impact technology will have on businesses in the insurance industry. Let us go through just a few of the technologies that are set to disrupt and redefine the industry in 2020.
Powerful Machine Learning (ML) to Prevent Fraudulent Activities and Predict Retention Rates
Machine learning has steadily been transforming the insurance industry’s digital landscape. It is especially useful when it comes to predicting the customer lifetime value (CLV) of a customer to an insurer. Insurance carriers can now predict the CLV by leveraging customer behavioural data to forecast cross-buying patterns and retention rates, which directly affects the company’s future income. Another area that ML will affect would be marketing and the personalization of insurance products. Insurance carriers can improve their marketing ROI by drawing insights from key data such as lifestyle behaviours, individual preferences, hobbies, and even attitudes to develop products like loyalty programs, recommendations, and policies. Finally, ML offers new methods and tools to classify risks and develop more accurate predictive pricing models to reduce their loss ratios. CLV predictions, more sophisticated rating algorithms, and personalized insurance products are just a few examples of how insurers can use machine learning and data analytics to their advantage in 2020.
Robust Blockchain Technology to Accelerate Claims Processing and Generate Clear Audit Trails
Blockchain stands to revolutionize the tech landscape of the insurance industry as the distributed ledger technology it uses prevents the unauthorized addition, removal, or modification of data. In this way, it offers unparalleled benefits from data security to clear audit trails. One area that Blockchain could have a lasting effect on is underwriting. Underwriting involves assessing whether a claim is trustworthy or not and determining how much of it to cover. Because of its nature, a trusted repository of data is required, which Blockchain technology provides. Claims processing can also be disrupted as all the required information for claims verification can easily be processed in record time. Moreover, this technology can also be used to store a patient’s medical history, making sure that it is easily accessible to doctors and helps insurers determine the correct procedures and policies going forward. Competitive and legal challenges can also be avoided when it comes to sharing information on fraudulent activities between insurers. This is because Blockchain provides a way to securely and safely exchange data, which increases the insurance carrier’s ability to monitor and track criminal patterns, thus preventing any future losses.
Enhanced Cyber Security to Protect Your Data and Investments
One other technology that is posed to massively transform the insurance industry is advancements in cyber security capabilities. Cyber security is not only set to impact the insurance industry from the insurer’s perspective, but also from the client’s side as well. The insurance industry has remained relatively traditional in nature and has been having trouble coping with advancements in technology. This is why they are behind other financial sectors in adopting them, especially when it comes to cyber precautions. Because insurance companies have access to enormous amounts of sensitive personal data, they have been subject to numerous attacks in recent times. These threats will not be disappearing any time soon so enhanced cyber security technology will have to pick up the slack. As this technology becomes more advanced, cyber security will play a bigger role in deterring hackers and dealing with outside threats. Cyber security could also influence the insurance industry through its inclusion in a host of different policies. Whether it is a standalone service or is an endorsement to an existing policy, cyber security coverage will be included in most policies for added security and act as another layer of protection for the insurer and customer alike. Cyber security technology, then, stands to radically redefine risk management for the insurance industry in 2020.
Blockchain, cyber security, and Machine Learning are rapidly evolving technologies in their own right. As the threats and opportunities that are inherent in the insurance industry keep changing, it is important that technologies keep pace as well. From enhancing claims processing and adding another layer of protection to your security measures to foreseeing behavioural trends and consumption patterns, there is no limit to the number of applications that will exist in the near future by leveraging these technology advancements. If you are looking to incorporate more sophisticated technology into your organization’s existing IT infrastructure, turn to getSmartcoders to ensure that you are primed to blow your business out of the water in 2020.