What it will take for insurance technology to survive and thrive in 2023

Check Out All The Smart Security Summit On-Demand Sessions Here.


The global insurtech market is expected to reach $10.42 billion this year, up from $8.07 billion in 2021, confirming that the pandemic-induced digital transformation of the insurance industry is here to stay. Additionally, insurance companies are in a race to stay relevant and reduce operational costs as supply chain disruptions, geopolitical crises, labor shortages and changing habits of consumption lead to increased operating costs.

As a result, insurers are accelerating their investments in digital technologies, applying artificial intelligence (AI) and automation strategies across business functions. These technologies help insurers operate at lower cost and much more efficiently.

But as this digital transformation continues at an increasingly rapid pace, it can be difficult to know which technologies to adopt. Let’s take a look at the top technology trends that will shape the insurance industry in 2023.

Climate change is having a major impact on the insurance industry, and only 8% of insurers are adequately preparing for it, according to the World Property and Casualty Insurance Report by Capgemini and Efma. “Insured losses from natural disasters have increased by 250% over the past 30 years, with perils such as wildfires and storms, considered to be particularly affected by climate change, causing losses to increase even more rapidly. assured,” the report says.

Event

On-Demand Smart Security Summit

Learn about the essential role of AI and ML in cybersecurity and industry-specific case studies. Watch the on-demand sessions today.

look here

The key to climate resilience is to balance risk prevention with risk management. The demand for technology solutions that can help companies leverage and integrate climate risk data into their models will continue to grow. About 53% of companies are already integrating new data sources, such as satellite data, remote sensors, geographic data, ESG models and water levels, to assess the most important risk information in real time. accurate and detailed. Machine learning (ML) can then be used to interpret this data and generate insights into the likelihood of a climate event or its potential impact.

Advances in data analytics are also allowing insurers to more accurately measure the magnitude of weather-related events such as floods. Parametric insurance coverage is becoming a popular solution to deal with these risks. Instead of providing payments based on the value and actual loss related to an asset, parametric insurance uses all the data surrounding the potential for a specific weather event to calculate the cost of coverage. This approach can be a more affordable alternative for risk transfer as long as the thresholds are calculated as close as possible to any loss that may occur.

Telematics and usage-based insurance are here to stay

Telematics technology involves tracking data about a vehicle’s movements. For example, it can instantly detect accidents and even initiate the claim process with the vehicle owner’s insurance company. Various service providers, such as repair shops, may also have access to telematics data to provide quotes or order parts. This can significantly reduce repair turnaround times and increase customer satisfaction.

Telematics data can also inform insurers about the driving habits of their policyholders. This is fundamental to usage-based insurance (UBI), a type of insurance that bills policyholders based on actual usage rather than estimates. According to Forrester Research, UBI policies could represent 20% of all automotive policies by 2024.

A typical example of UBI is pay-as-you-go, which allows drivers to pay based on the number of miles they drive. Not only is it a more affordable option for low-mileage drivers, it can be used to encourage customers to change their driving habits. For example, to reduce their environmental impact or the risk of accidents.

Shift customer expectations towards self-service

The pandemic has forced insurers to embrace technology and find ways to deliver a truly digital customer experience. Policyholders now expect to be able to interact with insurance companies remotely, and repeatedly, without interacting with a live representative at all.

Mobile apps, chatbots and online portals help all customers navigate everything from online price comparisons and quotes to handling complaints and after-sales service requests in one place.

Providing these self-service options has been shown to significantly improve customer experience and satisfaction. For insurers, it can also mean significant cost savings, especially for processes that require a lot of time and manual labor. Self-service platforms that leverage visual intelligence, a type of AI, can help insurers provide estimates, process claims, and even source needed parts or materials much faster, reducing thus minimizing manual interventions. McKinsey predicts that AI will reduce claims overhead by 70-90% by 2030 compared to 2018.

Survive and thrive in unpredictable times

The insurance industry is undergoing a significant transformation as unprecedented economic and environmental challenges arise. From inflation and the lingering economic consequences of the pandemic to increasing climate risks, insurers must find ways to reduce costs and future-proof their businesses. In the coming year, we will continue to see insurers doubling down on more flexible, customer-centric and affordable digital solutions.

Julio Pernía Aznar is CEO of Bdeo.

DataDecisionMakers

Welcome to the VentureBeat community!

DataDecisionMakers is where experts, including data technicians, can share data insights and innovations.

If you want to learn more about cutting-edge insights and up-to-date information, best practices, and the future of data and data technology, join us at DataDecisionMakers.

You might even consider writing your own article!

Learn more about DataDecisionMakers

Leave a Comment