737 336-5118 info@vironit.com

InsurTech Solutions: Effective Trends to Boost the Business

29.11.2022 Katrin Bertano,Xenia Shepard
InsurTech Solutions: Effective Trends to Boost the Business

In the age of digital transformation, following trends is essential if you want to keep your business competitive and moving forward.
Prior to 2010, the insurance industry largely utilized traditional business processes. With the rise of online business and remote work, however, the classic model of the insurance industry has lost its value. Most companies with traditional work styles now face challenges, as they struggle to recoup their cost of equity.

A solution was needed. Consumers were no longer interested in the agents’ physical presence or communicating with them by template. Consequently, demand for online services grew.
InsurTech startups stormed onto the market. Year by year, investment in the sector grew, from $140 million in 2011 to $2.7 billion in 2015.

A serious boom in InsurTech businesses started in 2020, alongside the COVID-19 pandemic, when traditional insurers faced a crisis. The popularity of online products rose by leaps and bounds. Traditional insurance businesses started reforming their approaches to improve efficiency and gain value.
In this article, we explore why InsurTech is so popular and how it solves the insurance industry’s problems. We cover the following topics:

  1. The Problems of Insurers
  2. What is InsurTech and Why is it Important?
  3. Benefits of InsurTech Solutions
  4. InsurTech Trends 2022: How to Use Them
  5. The Future of InsurTech Solutions: VironIT Opinion

The Problems of Insurers

Some insurance companies have struggled in recent years. The pandemic period in 2020 showed that traditional methods of insurance are no longer as relevant.
Moreover, Global research showed that over the past five years, more than 50% of insurers, representing 52% of the global industry’s equity, had an ROE below their cost of equity. The insurance industry as a risk protection sector consequently declined in value.

The fact that insurers lost their authority as risk protectors, can be explained as follows. In the age of digitalization and online business, consumers are interested in modern solutions. When they entrust their data and money to financial service providers, they require speed, flexibility, and security in return.
When it comes to the insurance sphere, however, potential clients face many challenges.

For example, insurance companies’ use of outdated technologies carries security risks. The high volume of incoming client data requires appropriate modern tools for processing, management, and security. Dated technologies limit the potential of the insurers’ growth and are hard to align with market needs.

Another challenge: mediocre insurance rates. The agents use specific indexes to determine the final individual rate of the insurance policy for each client. Nevertheless, the cost of the insurance remains high or, at any rate, represents poor value for money. In addition, there is a lack of personalization during the insurance sales process.

A further issue is the slow, complicated process of traditional insurance-buying, which deters potential clients. This process requires physical presence and face-to-face consultation, both of which cost the agent and the customer time. Relatedly, completing a traditional insurance policy form requires the customer to sign a huge number of papers, both originals and copies. In fact, the agent could be searching for more clients instead of patiently explaining the same information to dozens of people, while the client could complete the necessary forms remotely.

Fortunately, despite these challenges, InsurTech companies have solutions.

What is InsurTech and Why is it Important?

Insurance Technology, or InsurTech, refers to the implementation of innovative tools — artificial intelligence (AI), blockchain, machine learning, and more — to improve the insurance experience for clients.

The appearance of InsurTech startups, with their innovative solutions, has revolutionized the insurance sphere. InsurTech companies present solutions to problems within the insurance process and boost the efficiency of the insurance business overall.

InsurTech innovations extend across the whole insurance process. They address methods of communication between agent and client, but they also go much further: streamlining the processes of underwriting, distribution, marketing, and product design; standardizing workflows in all insurance lines (e.g., life, health, property, and casualty); and more.

Thanks to InsurTech, insurers implement modern solutions into their day-to-day work. This helps them to recover their authority among consumers and gain more value.

InsurTech is a compelling prospect that insurers must use to the utmost to survive the market’s competition.

Benefits of InsurTech Solutions

Thanks to constant technological development, more business models and opportunities are being introduced to bring efficiency to the insurance industry.

InsurTech solutions normally have two core objectives:

  • compete with, at beat, the larger, established insurance companies; and
  • grow demand for facilitated insurance services by solving the customers’ problems.

InsurTech solutions give insurance companies powerful tools to modernize their businesses.
Let’s consider some additional benefits that InsurTech brings to the insurance industry.

Boosted Efficiency

The right technology, when applied to a specific issue in the insurance industry, will improve the quality of both internal operations and external communication with customers. For instance, InsurTech tools can automate form-filling, saving agents time that they can use for networking or customer acquisition.

New Products

The demand for online insurance services from individual consumers and small/medium enterprises is growing leaps and bounds. These customers need more personalized products and individual approaches.

InsurTech has solutions to all these requests.

For example, AI capabilities are expanding. There is no longer the need to analyze data manually; businesses can delegate this task to AI to get more profit. Moreover, thanks to AI, it is now possible to create more and better insurance options for businesses.

Improved Customer Experience

InsurTech solutions uplevel customer experience. For instance, InsurTech platforms are excellent tools for customer data analysis. Specific platform algorithms help businesses understand their client’s behavior and propose effective marketing strategies.

Cost Savings

Apart from saving time, InsurTech products save money. The cloud storage developed by InsurTech companies, for instance, reduces the costs of maintaining both the insuring process and the whole infrastructure. All processes are held to higher standards of speed and precision.

Increased Competitiveness

InsurTech reorganizes and optimizes the workflows of the insurance company. Thus, with its newly modernized approach, the company can become more competitive and capture more of its market.

Risk Prevention

New capabilities in InsurTech make it possible to analyze more data issues and check new customers’ histories with other insurers. It thereby helps to eliminate the risk of fraud.

InsurTech Trends 2022: How to Use Them

InsurTech solutions help to optimize all busienss processes and make them more effective. Using the latest innovations, it is possible to modernize pricing and underwriting and work more effectively with claims. The right technology will help to reorganize policy management and inspire further product development.

According to a McKinsey report, InsurTech is heavily focused on marketing and distribution of its services. Following its decline, the revived insurance sphere needs to be promoted, and InsurTech also provides the solution here.

Among the top trends in InsurTech, the following are most popular:

Artificial intelligence & Automation

AI-based platforms streamline the efficiency of the consulting process and simplify the claims procedure, from first notice of loss to adjustment and settlement. This automation of standard processes enables prompt communication with customers.
Chatbots and dynamic claims forms engage the customers by answering their questions and solving problems in real time—without the need for real humans. These tools, which are developed using AI, use predictive scripts that modify their contents depending on the responses of the customers.

Big Data

Leveraging Big Data can significantly improve the underwriting process. Today, insurers can collect information about customers from all their wearable devices. Data pertaining to lifestyle, purchasing and entertainment habits, health conditions, clothing size and marital status can all be utilized to offer a more personalized insurance policy at a better price.
Previously, the agent could only ask for information about the client’s income, credit score, and financial history. The insurance had no flexibility in cost.

Blockchain

Blockchain technology is being successfully implemented in the insurance industry. This is a tool for building transparent, trust-based, and beneficial relationships with customers. The use of decentralized databases enhances the quality of managing customer data and pricing policies. Moreover, through its secure network, blockchain helps to reduce threat incidences and protect the customer from fraudulent actions.

Further advantages of blockchain technology are that it allows insurance companies to guarantee the stability of their prices and prevents them from implementing harmful policies.

Cloud

Cloud-based platforms integrate components of AI, Big Data and open APIs. Their aim is to make the value chains more rapid and efficient. Using Cloud technology, insurers can launch into new markets, pursue new deals, and raise the productivity of their companies.

IoT

IoT technology helps insurers limit their losses. This term refers to the sensors and minicomputers installed on physical objects that check their usage and control user interaction.
By tracking the status of these objects 24/7, IoT helps insurance businesses to arrive at reasonable policy costs while preventing the user from dangerous or incorrect usage of insured vehicles and other objects.
IoT excludes the human factor and helps the insurers to determine whether clients are honoring the terms of their insurance policies.

Today, InsurTech is on a roll, and is expected to expand at a compound annual growth rate (CAGR) of 51.7% from 2022 to 2030, according to research.

Modern InsurTech trends are already widely used in the insurance industry.

 

The Future of InsurTech Solutions: VironIT opinion

Today, InsurTech is on a roll, and is expected to expand at a compound annual growth rate (CAGR) of 51.7% from 2022 to 2030, according to research.

VironIT uses all the modern trends in software development. According to our team’s experience, the future of InsurTech is bright. If insurance companies continue implementing the latest InsurTech tools, both the effectiveness of the insurers and the loyalty of the consumers will spike.

Innovations in insurance, just like those in other sectors — healthcare, fintech, banking, and more — undoubtedly will push the insurers forward. InsurTech solutions create competition among the insurance companies, create new opportunities for corporations, and support the formation of new partnerships.

In VironIT’s view, the use of InsurTech solutions will bring further evolution to the insurance market. Furthermore, now that InsurTech companies are re-prioritizing collaboration, we can expect a new transformation: from B2C to B2B. In other words, insurance companies previously attacked each other to compete. Now, they are shifting toward cooperating with each other.

Thanks to InsurTech solutions, the insurance companies are getting stronger.

Our latest InsurTech project focuses on facilitating the process of obtaining an insurance policy. VironIT’s developers have created an automated platform that facilitates the complete insurance process. With this automation technology, the user completes interactive forms, receiving automated answers according to specific scenarios.

VironIT is open for work. Our teams of developers will create your idea from start to finish. Write to us with your idea.

Please, rate my article. I did my best!

1 Star2 Stars3 Stars4 Stars5 Stars (1 votes, average: 5.00 out of 5)
Loading…

Comments are closed.