With many industries being transformed through technology, the insurance sector is following suit as well. The insurance industry is going beyond the traditional means of doing business by employing technologies that will improve its services.
Finance Secretary Carlos Dominguez III, in a report on the Department of Finance’s Web site last year, urged the insurance sector to brace for digital revolution, noting that “the insurance industry should be at the forefront and center of technological changes driving our economies.”
Several technologies under the term insurtech have disrupted insurance, changing how it serves consumers and keeps their trust in several ways.
First, the technology available for the sector further helps secure information insurers hold. Blockchain, in particular, has the capacity to do this.
Also known as distributed ledger technology, blockchain is a security method by which digital information (the “block”) stored in a public database (the “chain”) is secured against other data in the system, keeping it safe from hackers.
An article by software development outsourcing company Ignite Outsourcing illustrated blockchain’s application to insurance.
“Policies, medical records, and all the other information that goes into an insurance business can be locked up on the chain. If there is an attempt to tamper with or steal it, its owner will instantly know,” it said.
Technology also enables insurers to address consumer demands fast.
Ignite Outsourcing noted that with millennials gradually dominating the consumer market, millennials are spending more money than any other demographic and are more confident with new technology.
This is where certain technologies come in to meet the current needs of the consumers. Chatbots, for instance, “are useful at handling a large number of similar queries and are popular for home and motor insurance, especially amongst young professionals who use instant messaging applications for everyday communication,” Marketing Manager Anna Kurmanbaeva wrote in a post in Medium.com.
Insurance has also gone ‘on-demand’, giving consumers access to insurance coverage and customization of products anytime and anywhere.
Furthermore, technology aids the sector in getting consumer insights. Through devices and wearables like Fitbit, insurers can learn more about the behavior of their clients.
Telematics, which uses various technologies to gather and provide information to the driver of a vehicle at a distance, monitors the driving habits of customers for more accurate risk profiles and pricing.
In addition, the Internet of Things, where devices and sensors can be connected to the Internet and communicate with each other, assists insurers in monitoring their customers’ lifestyles, providing health insurance quotes, and validating claims based on gathered data.
Lastly, technology makes the insurance processes faster. By eliminating human error, artificial intelligence and automation can speed up the entire claims process.
Also, according to a report of the Institute of International Finance in 2016, AI “could help insurers enhance automation, reduce risk and expense, increase productivity, and facilitate better and faster decision-making.”
Big data analysis, with a capacity that exceeds that of actuaries and claims adjusters, can also automate tasks within the claims process and make risk calculation more accurate. — Adrian Paul B. Conoza