Technology – Redefining Insurance
The insurance industry has garnered more importance and buyers in the past decade as assets to be insured have grown manifold. The business which has been providing employment for millenniums has seen a major boost in its diversification and revenue with the advent of technology, better lifestyle and the need to insure every dear thing that a person owns. A few decades ago, the things that were insured were primary assets such as houses, businesses, automobiles and other expensive machinery. But today, you could buy insurance for almost every modern need – pets, films, etc. Just the way insurance products have undergone transformation, the way insurance is provided or the various mechanisms used to deliver service have also undergone a paradigm shift.
Customized premiums:
Gone are the days when you had to buy expensive insurance coverages annually or stay insured at all times. Today, IOT and Telematics have made pay-as-you-use insurance models possible across various insurance products. Now you don’t need to insure that old car lying unused for months in your garage. You can insure it for a few days whenever you plan to take it out for a long drive or plan to use it occasionaly for short spans of time.
Insurers use telematics to record the distance and time the vehicle is driven and the premium reduces with the increase in the duration the vehicle stays stationary. There are various other auto insurance offerings as well, where insurers provide discounts and offers basis the way you drive your car. Through telematics, they transmit data from the car onto their systems to monitor the driving behaviour such as sudden braking or accelerating, over-speeding and accidents. A Canadian insurer tracks customers’ driving pattern and if you aren’t involved in an accident for at least 5 years for any fault of yours, your premium remains unchanged even after your first motor accident when being at fault.
The same idea is used to track the health and physical activities of a health insurance plan holder. Insurers provide free wearable activity monitors to track and analyze health and behaviour of the policy holder to incentivize people to develop healthy habits. This not only helps insurers to provide better premium rates and service, but also enables them to guage the probability of future claims and mitigiate risks by revising premium rates as per customer data.
Insurance-on-the-go:
How many times has it happened that you saw a police officer and realized that your vehicle policy has lapsed or remembered that you forgot to buy travel insurance for an international flight you are about to board? Gone are the days when you had to submit a long list of documents to buy insurance. With insurance apps, buying insurance has become lightning-paced with minimal documents and just a few taps on the mobile screen.
The instantaneousness is not just restricted to buying insurance, but the claims process has been expedited tremendously, with an insuretech firm in US claiming the world record of settling a claim in 3 seconds. Mobile apps have played a great role in this change. Now, you don’t need to file endless documents and proofs, but rather just use your mobile phone to create instant evidence by clicking pictures or recording videos showing and describing the damage. Insurers take these as substantial evidence to process a claim, thus ensuring quick processing and resolution.
Being-social:
Social media has opened the floodgates for customer targeting and influencing. It is a customer goldmine just waiting to be dug into, with huge reserves of data wealth. Financial need anlysis has reached a whole new level with family, professional and financial data being easily available in analyzable digital formats. Insurers are now able to target customers by their interests and behaviors, making it easier than before to pitch and promote relevant insurance products. So the next time, don’t be surprised to see pet insurance or travel insurance ads being targeted to you, if you have declared your interest in them in the digital world.
Social media is not only a targeting platform, but also serves as a reference guide for many insurers while processing claims. Some insurers in the US lay great emphasis on the study of social media channels hoping to find a way-out of having to settle theft claims. The argument is, when a customer signs an insurance agreement, he/she agrees to take due care and act responsibly to safeguard the property or assets. So, the next time you post your travel plans or holiday pictures on social media, thus inviting a potential burglary, remember that your insurer might be waiting to talk about a social media update of yours that you might not like to discuss in connection with a burglary .
What it means for the customers?
The insurance industry is abuzz with technological advacements in every possible platform, medium and channel. From health monitoring wearable technology to IoT devices monitoring household items, from digital evidence collecting apps to a 3-second claim settling AI-enabled bot, technology has enabled the insurance industry to the core. Technology has connected insurers and customers, thus opening opporutnities for innovative products such as peer-to-peer insurance, customized insurance and instant insurance. Customers now find themselves at the epicentre of customer delight. This augmented customer experience is also creating a ripple effect, connecting more customers with an insurer who excels in delighting and communicating by leveraging technology and innovation.
About the Author
VP & Head – Practices, Clover Infotech
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