The Future of Insurance: 5 Key Developments in InsurTech

How is technology used in insurance? 

Over the years, technology has come to have a significant impact on the way insurance companies operate. Not only can technology benefit businesses by automating systems and improving risk management, but it can also be highly beneficial to customers by improving user interfaces and customer service experiences. From AI algorithms made to identify suspicious claims, to streamlining underwriting processes and enhancing customer engagement, the blend of technology in the insurance sector (InsurTech) has been highly beneficial in many ways. 
 

What is meant by InsurTech? 

InsurTech refers to the use of technology within the insurance industry as a means to disrupt and improve the current insurance industry model. It aims to help streamline processes, analyse data and develop more efficient, customer-focused insurance solutions. The primary goal of InsurTech is to create an improved way of collecting, analysing and utilising data, to better power decision-making and services. 

InsurTech leverages tools such as AI, machine learning, automation, blockchain and cloud computing to help improve business processes. Said to be revolutionising the traditional insurance industry, InsurTech is helping businesses create more personalised, effective and user-friendly experiences. 
 

Why is InsurTech important for life insurers? 

InsurTech can be crucial for life insurers as it provides a way to modernise and streamline operations, and can help foster growth and drive competitiveness in this rapidly evolving market. By automating operations, improving efficiency and lowering costs, the use of InsurTech within life insurance businesses can help insurers reach new customers and markets and ultimately increase profitability. 
 

Key developments in InsurTech 

Integrating AI and other advanced technologies into businesses has created many key developments that are reshaping traditional insurance models. Leading the industry towards a smarter future, below we have listed five key developments within InsurTech that are changing the game for businesses. 

For a broader view on recent developments, offering clear, solution-focused guidance for industry leaders, read XPS Insurance Watch here: What are the five key questions the Insurance C-suite need answers to now?

Blockchain for smart contracts 

Blockchains are used as a way to record and share data in a secure way. Within the insurance sector, blockchains have been used as a way for companies to reduce the risk of fraud, enhance business transparency and improve efficiency with smart contracts. These smart contracts help to automate many elements of the claims process, in turn reducing costs and minimising any potential human errors, providing customers with a more reliable service. The introduction of blockchains within the insurance sector is also great for facilitating better data sharing and accurate record keeping, which is vital in verifying claims and insurance transactions. 

Digital customer experience 

In a technology-centred world, customers expect most interactions with companies to be digital-first, especially when it comes to insurance. Whether it's choosing a policy, processing claims or interacting with representatives, investing in digital platforms can help to improve customer experience. From creating AI-powered chatbots to easy-to-use mobile apps and websites, technology can help to provide an accessible and easy-to-navigate interface for all customers. 

Cybersecurity and data privacy 

InsurTech has also enhanced cybersecurity and data privacy in the insurance sector through the introduction of AI-powered threat detection and zero-trust frameworks. Helping to analyse patterns to easily detect fraud and creating strict identity verification walls, InsurTech has given businesses an added layer of protection against data breaches and ransomware attacks. Not only does this benefit businesses by ensuring data is secure and regulations are complied with, but it also gives customers peace of mind, in turn enhancing customer satisfaction. 

Cloud computing 

Cloud computing is another development within InsurTech that has transformed the sector by allowing companies access to cost-efficient IT solutions. Cloud computing gives insurers enhanced data storage and accurate, real-time analytics which can help support the growth of companies within this sector. It also allows companies to pay only for what they use, scaling IT resources like software, analytics and databases up or down based on demand, creating an effective and streamlined process that can easily adapt to business needs. 

AI and Machine Learning 

AI is another InsurTech development that has made a profound impact within the insurance sector. AI-driven technologies have improved the efficiency of business by allowing insurers simple and secure ways to process claims faster using automated systems and Machine Learning that eliminates the need for human intervention. From generating reports to scheduling processes and underwriting, the use of AI, ML and Robotic Process Automation (RPA) ensures that routine tasks are carried out accurately and efficiently.  

If you’re interested in learning more about how these developments are impacting this sector, you can read our blog on AI and the insurance industry to find out more on the benefits and challenges that come along with AI. 
 

How XPS can support you with InsurTech 

To help you stay competitive within this ever-changing industry, XPS Insurance Consulting can assist in the integration of InsurTech into your business so you can reap the benefits of new technologies. Learn more about our Insurance Consulting services or get in touch with one of our insurance experts to find out more.