Insurance is an old industry. Like all older industries, you have to become more modern to meet the demands of your customers. Otherwise, you lose those customers and quickly fade away. This is why most insurance companies are investing in insurTech.
Over the past few years, insurTech has emerged in the insurance space. Investments have grown by leaps and bounds — whereas $140 million was invested annually in 2011, investment climbed to $270 million in 2013, and $2.7 billion in 2015.1
It’s easy enough to throw the word insurTech around, but what exactly is it? InsurTech is the use of technology innovations designed to make the current insurance model more efficient. By using technology, such as data analysis and AI, insurTech allows products to be priced more competitively.
Using inputs from all manners of devices, including GPS tracking of cars to the activity trackers on our wrists, insurance companies are building more finely delineated groupings of risk, allowing products to be priced more competitively.2
For example, some insurance companies already have devices you can connect to your car that monitors how you drive. The information received from the device is checked by the insurance company after a period of time. This correspondingly gives the customer a rate that matches with how they drive.
InsurTech and the Claims Process
The global insurTech market is expected to grow at an annualized growth rate of 41 percent from 2019 to 2023.3 In five years’ time, that’s a pretty significant increase. How exactly does this shift to a more technological approach help with claims correspondence?
Newer insurance companies are quick to invest in the latest technologies, including best-in-class claims correspondence software. Meanwhile, established providers with legacy core systems launch digital transformation initiatives with a focus on customer experience.
InsurTech by and large allows insurance companies to create mobile apps that allow customers access to a host of things they want. These include 24×7 customer support either by chat or talking to a representative, the ability to take pictures with their mobile device and upload data immediately to your servers, and more. Also, many insurance companies are working on apps that create on-demand insurance for the Gig and Share Economies.
Improving the Customer Experience
Senior insurance executives realize that creating a positive customer experience is one of their top priorities. In light of this, using insurTech is a step in the right direction.
InsurTech is extending innovation throughout the sector, creating a competitive threat to incumbents but also potentially valuable opportunities for partnering on the changing terrain. Customer expectations of instant digital transactions sustained seamlessly across digital channels are increasingly the norm.4
So again, if your insurance company isn’t at least looking into new technology, insurTech, and the right claims correspondence software, you might get left behind.