Technology Is Changing Insurance for The Better An entire industry has become both more efficient and secure.
By Chris Porteous Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The days of customers calling an insurance company out of the blue and getting a quote over the phone are fading fast. Customers today are digital natives and want the best rates from every insurer out there at the tap of just a few clicks. If they can do so without ever having to dial a phone number, all the better.
Insurers are well aware of this and are rapidly investing millions in new startups and platforms that are already changing the industry for the better. Bye bye, mountains of paperwork. Technology's impact on the insurance industry isn't simply taking the headache out of the buying algorithm for customers, it's also saving us money. (Not surprisingly, price is at the top of customers's concerns when buying insurance.)
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Big Data and AI Are Driving the Evolution
Repetition is a standard practice in insurance, and there's huge potential for artificial intelligence to take on that load of customer inquiries, claims reports and data analysis. The development of AI in insurance will not only speed up the time it takes for a customer to buy a policy or settle a claim, but will be able to take historical and behavioral data such as a driving record and create more personalized packages. The fewer tasks an insurance company has to hand off to its brokers that can be completed with the assistance of AI, the more savings that can be passed on to the customer.
The development and growth of technology in the industry isn't a boogeyman that will render the insurance brokers as obsolete middlemen, either. Instead, it's redefining the role of the broker and broadening their ability to assist the customer. Rather than merely offering up a list of price options, they can now offer more knowledgeable assistance using the data generated by AI to better assess the facts and add more value when dealing with customers.
It's why so many companies have implemented chatbots into their customer service offerings on their websites. The more knowledge that a broker has regarding a customer's needs upfront, the quicker and more efficiently they can serve them.
Related: A Few Thoughts for Insurance Entrepreneurs
Tech Is Creating a More Secure Customer and Industry
According to the FBI, the total cost of (non-health insurance) fraud each year is a staggering $40 billion. The practice of using AI to spot unusual patterns that could be linked to bogus claims will save the industry (and consumers) millions in the long run. And, you guessed it, it will also speed up the processing of those legitimate claims.
Technology today isn't just saving consumers more time and money, but is saving lives. Take the teenSMART driving program, for example. The driver-simulation program uses computer-simulated technology to teach inexperienced teen drivers the ways of the road, and those who complete it have 30 percent fewer collisions and are offered lower insurance rates through numerous providers.
As autonomous vehicles cross over from being simply a technological oddity to the norm, the role of insurance will change again with AI will factoring in. Some OEMs are already considering this and building insurance policies into the vehicle purchase. With fewer accidents on the road (fingers crossed) because of self-driving vehicles, premiums will plummet.
Like so many other industries, the rapid advancement of technology is changing how insurance businesses operate and interact with customers. Thankfully, much of it seems to be for the better.
