A number of tech services have made their way into the insurance industry, transforming traditional insurers into digital delivery specialists offering security, convenience, and choice to their clients. Insurtech has become the buzzword to define the integration of things like artificial intelligence and the Internet of Things into pricing and underwriting for coverage. Blockchains, drones, telematics, and smart contracts are being implemented to provide consumers with the best insurance options.
What Does Insurtech Mean?
As a combination of the words insurance and technology, the term insurtech accounts for the technological innovations that are being used to elicit more efficiency and savings from the traditional models of insurance providers. As other industries have faced disruption and innovation for the sake of improvement, this move is showing that large insurance firms are out of touch with the modern consumer. Trends in new delivery include social insurance, highly customized policies, and data analytics to price premiums according to personal behavior.
Why Is Insurtech Important?
To evaluate the importance of Insurtech, you need to look at the benefits that come from technological integration. Here are just a few of those benefits.
- More control of insurance rates: Whether it is the cost of health insurance or car insurance, everyone wants a better, more affordable rate. As individuals continue to rely on technology to change their lifestyles or habits, there will be a noticeable impact on insurance rates. Wearable fitness devices and tracking apps can help individuals manage their weight, improving their overall health. This can lead to reductions in health insurance costs. Driverless cars and increased safety controls can lower accident numbers and improve auto rates.
- Reduced underwriting costs: As 2020 draws closer to an end, there will be a record number of internet-connected sensors and devices capable of providing the real-time information that affects underwriting costs. Homes that are damaged by fire or buried within a tree line can be reached by drones, capturing images to inform policy pricing. The increase in efficiency and accuracy of data improves the costs of service.
- Greater fraud prevention: Billions of dollars are lost each year around the globe as providers try to battle insurance fraud. When the accuracy of AI and machine learning is merged with data analytics and automation, the end result is a more rapid awareness of potential fraud through claims or fake insurance accounts. Digital signatures provide a way to immediately verify active policies and contract elements against claims suspected of being issued on a policy that was not active at the time of the incident.
Using data from several inputs, this new insurance model is recreating and redefining risks. As this occurs, prices will continue to become more competitive without having to compromise on the quality of coverage or services rendered. Getting your business on board before it is too late can make you a strong contender in the industry.
About 3XY Insurance Solutions
3XY Insurance Solutions provides innovative solutions and consulting services to insurance executives looking for a competitive edge. We develop exclusive programs and products; leverage markets, partnerships, and talent; and capitalize on digital capabilities to accelerate growth and increase profitability. Contact us today at 215-322-5497 and see if we can grow your insurance business and improve its profitability.
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