Competition is rife in the insurance market – now more than ever. Technology is reshaping the industry, but it is an exciting time for everyone involved. Companies are using digitisation and automation to streamline processes. And customers are reaping the benefits. KPMG’s Matchi team has taken a closer look at the trends that are making waves in the insurance game.
1) RPA will entrench itself further
Many insurance companies are shifting to Robotic Process Automation (RPA) to improve their automation of workflows and operations. It is estimated that RPA reduces the claim registration and processing time by at least 50%. It has particular application in the insurance cancellation process.
2) Chatbot Technology is growing
Chatbots have the ability to collect customers’ geographic and social data for personalised interactions and customise insurance coverage. Companies have already used chatbots to provide policyholders with lower waiting time, seamless support and hassle-free claim settlements.
3) Wearable Tech will be a key focus
Wearable tech offers usage-based insurance to consumers through obtaining personalised data to decide on the insurance premium rate on the basis of lifestyle, driving habits and so on. The spinoff is the incentive for users to adopt a healthy lifestyle and safe driving habits.
4) Insuretech getting traction
Insuretech is starting to distinguish itself from generic fintech by creating specific use cases and solving insurance related problems. This is being driven by access to new technologies, changing customer needs and the glacial response by incumbents.
5) Prevention over protection
Smart devices, telematics, and IoT technologies are giving insurers the means to track customer activity and offer actionable insights, supportive resources, and services to prevent claims before they happen. Prevention is a win-win for users and insurance companies who minimise their losses.
6) Artificial Intelligence
Allied to RPA, AI increases agility and speed, especially for easily teachable tasks, like claim validation. It also improves the customer experience by minimising friction in customer interactions and easily doing simple tasks through voice activated tech, as an example.
7) Internet of Things
IoT allows for mass customised of insurance where it can be personalised and dynamic. Insures need to be wary of the threat that IoT providers poses in offering insurance with their devices (“invisible insurance”) – especially since they have granular data to measure the actual risks.
8) Outsourced and managed services
Insurers have to create a clear service delivery strategy by leveraging external expertise, from demonstrated providers who have the ability to enter into partnerships to provide specific services to their clients.
9) Insurance as a platform
Business models are changing. Whereas insurance has traditionally been provided through a closed commercial eco- system, providers are moving outside this box to offer platforms upon which other services (for example InsurTech, health apps, P&C software) can operate.
10) Insurance “on my terms”
With the evolution to predominantly algorithm-driven models, companies are moving customers rapidly toward micro insurance models. Customers can personalise their insurance cover with more granularity by switching off options at will, such as covering items only on weekends.
When it comes to product innovation, there are fintech solutions that can help insurers design products for new categories – like on-demand insurance, usage-based insurance and cyber-insurance. Whereas digital competitors would focus on a single segment or business model like P2P. Technology is also being used to automate activities, like claims processing and assessment. It’s clear to see the positive impact digitisation is having on insurers and customers alike. If you’re wondering how fintech can help you deliver even better service to your clients, speak to us today.