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5 ways technology is changing the insurance industry


It is natural to link technology and artificial intelligence to sectors like telecommunications, marketing and manufacturing. In the insurance industry, maybe not so much. Customers are still getting cards in the mail, meeting agents in their offices, and speaking with adjusters. Yet technology is transforming the way insurance companies provide coverage and how policyholders receive service.

Advances in technology are beginning to automate and predict standard insurance-related tasks, from filing a claim to adjusting a policy’s coverage. As the industry embraces things like artificial intelligence, machine learning, and other technologies, the relationship between suppliers and customers is also changing.

More efficient processes and data analytics won’t necessarily remove the human touch. However, these advancements will increase accuracy, make information more accessible, and have the potential to dramatically improve carrier-customer interaction. From the perspective of insurers and customers, there are five ways technology is revolutionizing the insurance industry.

1. Artificial intelligence provides faster claims estimates.

Generally, when an insured files an automobile claim, an adjuster must be present to assess the damage to the vehicle. The client initiates a complaint online or by telephone and must wait for the expert to meet him. An expert examines the car, notes defects and losses and draws up an estimate. This estimate can take several days, extending the time between the customer’s first contact and payment.

During this time, the customer is likely without their car or stuck in a vehicle with visible damage. Artificial intelligence is accelerating the time it takes for insurance companies to provide and process estimates. Instead of waiting for an expert, policyholders can instantly use apps to take photos of the damage they need to repair. An AI-based Algorithm comes up with an estimate in seconds. This allows insurance companies to get money to the policyholder or repair shop faster.

2. Telematics determines premiums.

Telematics may not be a familiar term for many insurance customers. But they may be aware of this emerging trend in car insurance premiums from their current insurers. Some insurers are sending out invoices and emails touting new technology that tracks customers’ driving habits. It’s a monitoring device that goes into a car and records a driver’s habits.

These devices are used to collect data including locations, speeds, driving distances and accidents. Insurers then take this information into account to determine individual premium costs. In theory, aggressive drivers and those who drive more miles could end up paying higher premiums. Conscientious customers and those who drive less will pay lower fares. Telematics improves the accuracy of risk assessment for suppliers and rewards drivers with good track records.

3. Drones assess damage.

In general, the use of drone technology is on the rise in many industries. Current projections indicate that the market will reach a value of over $63 billion by 2028. Estimates also reveal that the compound annual growth rate of the market from 2021 to 2028 will be around 16%. The insurance industry is already contributing to this growth by using drones to assess damages. Homeowners filing claims for roof or storm damage may soon be surprised to see a drone hovering over their properties.

Instead of relying on roof inspectors, insurance companies can send drones to take photos of hail and wind damage. The use of drone technology increases the efficiency, accuracy and safety of these assessments. Suppliers can use drones to travel to areas inaccessible to humans after major storms. This technology also has the potential to capture damage from impractical or dangerous angles that humans cannot reach.

4. Machine learning automates claim forms.

Filing a claim after a car accident or major emergency can be nerve wracking. Anxiety and shock can make it difficult for clients to remember critical details, such as the time of the event. Going over the details of a form online or with a person can be too much for a policyholder to handle and often contributes to additional stress. However, insurers often stress the importance of filing a claim immediately.

Machine learning removes some of the burdens customers may encounter during the claims process. Forms pre-populated with data from a client’s history and policy eliminate the need to repeat information. Machine learning reduces the risk of errors during the filing process and increases efficiency. Even minor claims like windshield repairs are simplified as contractors file claims for customers using their policy numbers.

5. Social media makes customer service more accessible.

No one wants to wait or spend hours wondering if their insurance agent got their message. Before social media and chatbots, this was the reality for most policyholders waiting for a phone call. Asking a question, trying to get a new policy, or making changes to existing coverage can take weeks. But now that insurance companies are present on most major social media platforms, it has become easier to receive customer service. Chatbots and emails can also be ways for customers to get help when they need quick answers to questions like policy and coverage.

Research indicates that messaging is now ranked second among customer service channels used by consumers. Chatbots and social media instant messages can answer common questions about updating addresses, changing deductibles, and filing claims. A customer can send direct messages on social platforms and get responses the same day. Often carriers can provide solutions in minutes or at least get the ball rolling. Satisfaction increases as customers get better service.

Technology in the insurance industry

Technical advancements are influencing the way customers and businesses interact with each other across multiple industries. Insurance is one of them, as carriers incorporate technologies such as AI telematics and machine learning into their business models.

Providers and customers stand to benefit from these improvements as coverage and service become more accurate. Without forgetting the simplification of processes and the increase in accessibility. The human touch will always play an important role, but technology is here to stay and will continue to play a role in improving the overall customer experience.

Featured image credit: David Peinado; Pexels.com. Thanks!

Brad Anderson

Editor-in-chief at ReadWrite

Brad is the editor who oversees contributed content on ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase. You can reach Brad at readwrite.com.

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