How Technology Is Reshaping the Future of Insurance

April 21, 2023

Technology is changing the insurance industry, creating new opportunities and needed skills in this previously tradition-bound industry.

The technology and operational functions within the insurance space have long operated independently of each other. Technology does appear from time to time in company operations, but the underwriting, claims, and marketing processes are traditionally manual ones.

In the past, the application of new technology within this space was limited to customer service and claims management. But as IT gains a foothold, it brings about fundamental changes in day to day operations, customer outreach and service, fraud detection, prediction of risk, and ultimately, risk prevention.

The extensive internet use has completely changed the distribution channels for insurance products and companies. The use of smartphones and apps are changing the way customers are interacting with various services, and an app-based economy is on the rise. As we move in that direction, people prefer to have all services in one easily accessible place.

Shifting the way a company handles operations can be a big undertaking. Still, those that make this change can see a substantial drop in both expenses and time spent, allowing businesses to make more investments, reduce prices, and improve profitability.

Some critical changes across the insurance industry that are being documented through use cases are:

  • Smartphones and readily available internet access have created considerable growth in potential customers and made it feasible to reach under-served parts of the country where a physical presence is not always possible.
  • Artificial Intelligence (AI) and Machine Learning allow for in-depth research of customer data, which in turn, leads to more accurate risk profiling and precision in premium calculations. This advancement has provided the opportunity to lower premiums for a large portion of the insured population.
  • Internet of Things (IoT) has made the collection of customer behavioral data achievable in real-time. By having this information, insurers can better calculate customer premiums.

Outside of the variety of technologies above, insurance companies have been exploring some potential upcoming technologies. These technologies can be used in a variety of ways from group insurance underwriting, accurate and precise premiums based on recorded customer behavior, and electronic claims settlement for sufficiently evidenced claims.

Digital solutions, technology-based processes, and innovative new products are the keys to long-term growth opportunities within the insurance industry. If you’re looking to innovate within the insurance industry our team is here to help. Here at VAULT, we put the founders first and work to find a solution that helps them move forward.

To schedule your free consultation and to see if our team would be a good fit for your product, reach out to today!

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