7 Ways in Which the Insurance Industry Will Change in 2023
Photo by Vlad Deep @ unsplash
Insurtech, in the post pandemic world, is witnessing an accelerated pace of adoption. Organisations that had hitherto deployed tech to alleviate their customer experience services only, have now leapfrogged to also plug in digital tools and platforms for the automation and streamlining of core insurance processes. And most importantly, to infuse them with business continuity, safeguarding them from outages caused by conflicts, natural disasters or even pandemics.
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Pointing to the heightened adoption, the Grand View Research report says that the global insurtech market was estimated to reach $5.45 billion in 2022 and is expected to reach $7.87 billion by 2023, $99.7 billion by the year 2026, thereby growing at a CAGR of 34.8%. These numbers are a testament to the tectonic shift the insurance industry is undergoing currently.
Seven Insurtech Predictions for 2023
The industry is abuzz with many insurtech possibilities. Let us look at the most promising ones:
I. Artificial Intelligence
Artificial intelligence (AI) is the talk of the town! In the insurance industry, it is being considered for avenues beyond AI-enabled chatbots for customer support. The power of AI is now being harnessed for faster analysis of large data sets to make underwriting processes more responsive, for fraud detection machine learning algorithms to achieve higher detection accuracy of fraudulent insurance claims, etc.
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II. Telematics-led insurance
What is fleet telematics? Telematics, the use of technology to track and monitor driving behaviour, is set to become increasingly popular in the vehicle insurance sector. With telematics, insurance companies can gather real-time data on driving behaviour, allowing them to offer personalised, data-driven insurance policies. This will also help further reduce fraudulent insurance claims and lower insurance premiums for safer drivers.
III. Blockchain technology
By creating a secure and transparent ledger of transactions, blockchain technology will be able to streamline processes, reduce fraud, and increase efficiency. Claims processing, underwriting, P&C insurance, health insurance, reinsurance, life insurance, travel insurance, fraud detection and risk management processes are set to make the best use cases for blockchain adoption.
Supplementary reading: Blockchain Is A Technology For Collaboration
IV. Machine Learning
Insurance companies generate a lot of customer data, yet they structure and analyse only 10-15% of this data while the balance remains unstructured and unharnessed. Machine learning is an appropriate panacea to this problem. When applied across data sets, machine learning can provide insights with respect to risk analysis, customer behaviour, fraud identification, expense management.
V. Insurance Marketplace
With the availability of a plethora of plans across every segment of insurance, insurance marketplaces have assumed great significance in the current world. They aid in comparison and decision making based on need and budget, in addition to providing several free services.
VI. Data Analytics for Insurance
After cloud-based technologies, it is data analytics that is proving to be a game changer in the modern world of insurance business. Insurance organisations are increasingly analytics-driven – they are harnessing data to reevaluate risks, prevent loss, improve customer experience, enhance efficiency and enable quick decision making. Leading organisations tap diverse domains to derive relevant data including environment studies, industry-specific reports, government surveys etc.
Read more: Leveraging Data And Analytics To Make Purposeful Decisions
VII. Insurance APIs
Digital savvy customers, now a norm, demand heightened digital capabilities from their insurance providers. They are no longer content with mere web and mobile integrations, or even chatbots. Carriers are therefore left with no choice but to graduate to using APIs including the Internet of Things (IoT) that make better assessment of risks to drive effective underwriting, increase product customisation to suit requirements, improve fraud detection capabilities etc.
What role will insurance BPM partners play in the digital transformation through insurtech?
1. Aid in insurtech adoption
BPM partners provide a wide range of services, including technology implementation, process optimisation, and data management, to help insurance companies integrate new technologies and automate processes. They also provide expertise and guidance on how to adopt insurtech in a way that aligns with the company's goals and objectives.
2. Help in further enhancing customer experience
According to a survey from the IBM Institute of Business Value, it was observed that 60% of insurers accepted that their company do not have a customer experience strategy. By leveraging technology and data analytics, BPM partners provide a more personalised experience to customers, enhance the customer journey, and improve communication and engagement. This results in increased customer satisfaction and loyalty, which often result in a competitive edge in the market.
3. Help in generating business success
BPM partners play a critical role in driving business success by providing support and guidance to insurance companies as they navigate the rapidly changing market. They help companies identify areas for improvement, optimise processes, and adopt new technologies to drive growth and increase profitability.
4. Improve customer retention
Maintaining customer retention is essential for insurance companies, and BPM partners help achieve this by enhancing customer experience, improving communication, and automating processes. By providing the tools and additional support needed to keep customers engaged, these partners can help companies build lasting relationships with their customers and retain their business for the long term.
Read more: Want To Drive Customer Attraction And Retention? Start By Telling The Truth
Conclusion
After two years of being inflicted by the pandemic, insurance organisations are now roaring back into the business-as-usual (BAU) mode. 2023 will see them make a leap for digital transformation. Insurance BPO partners will play a vital role in ensuring their clients transition smoothly into the world of digital, sharpen their processes and stay ahead of competition. Outsourcing partners will be able to provide support and expertise to help companies adopt new technologies, improve customer experience, streamline operations, and will drive long-term business value.
Auxiliary reading: Types of Business Insurance Every Business Needs
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Business
Shriya is a business development and product management professional at Cogneesol. She has diverse experience in brainstorming & strategising tactical business solutions to spearhead expansion projects and navigate collective growth by fostering robust relationships with clients and stakeholders.
