According to a report released by PWC (PricewaterhouseCoopers), the number of middle-class population is supposed to increase to 1.2 billion by 2030, which means an increased demand for life & health insurance policies. Furthermore, a report by Allianz shows that the global insurance penetration rate is expected to increase by 5.8 percent in the next 10 years.
But here’s the twist: this time frame will also bring a massive number of potentially disruptive changes to the insurance industry. In addition to this, the number of internet-savvy consumers is also going to increase from 1.8 billion today to around 5 billion by 2020. This new internet-savvy generation will naturally expect, as well as demand, transparency, seamless accessibility and quick response from health insurance companies.
Keep reading to find out more about 5 innovative tech trends that are going to leave a positive impact on the insurance industry.
Gamification is the hot topic these days due to its tremendous potential to engage more and more customers. It is a trending pick amongst the tech-savvy younger crowd. This is the reason that a considerable number of life & health insurance companies have started using gamification techniques worldwide to make people familiar with the complex workings of health insurance policies.
AXA Group is one such insurance company. It introduced its game CrazyCash in Indonesia to educate the masses about the working structure and benefits of insurance products the country has a very low level of understanding (approx. 2 percent). The game became an instant hit among the players with over 200,000 tweets for AXA. Within 5 weeks of its launch, CrazyCash was able to get over 225,000 page views for the company’s official website.
Looking at this, we believe that a substantial number of life insurance companies will be using this method to attract more customers. The gamification process will not only make the customers understand about life insurance easier but will also create brand awareness while convincing people to purchase life insurance plans to evade risks.
2. Wearable Tech
Even though wearable technology is not a new thing in the market, life insurance industry is still taking its time to realize the complete potential of this trending technology. Experts of the industry believe that wearable tech market would grow substantially at a CAGR (Compound Annual Growth Rate) of 15.5% to reach 51.6 billion USD by the year 2022.
In 2017, some premier names in the insurance industry, like State Farm Insurance, have leveraged the usage of wearable technology along with sensor-based technology to generate precisely measurable client data to come up with accurate risk underwriting.
Given that, almost 63 percent of insurance professionals have already pinned their faith on wearable & sensor-based tech, which implies that, soon, it will become a norm. This realization is significantly encouraging a lot of life insurance companies to welcome wearable technology to get an edge over their contemporaries.
3. Chatbot Technology
In 2017, the Chatbot Technology emerged as one of the most sought-after technologies amongst life insurance companies. A report published by Capgemini-Efma reveals that 75% of life insurance providers are actually planning to make an investment in the Chatbot technology in the next 3 years.
Policybazaar.com, an Indian insurance aggregator website, is one of those companies that have already implemented the usage of Chatbot to identify the risk exposure involved in an applicant’s case. This technology has helped the company increase its overall auto insurance sales by 40%.
It’s safe to say that the demand for Chatbot technology is only going to increase with time. In fact, its demand is supposed to be 5 times higher as compared to the previous year. The new generation customers expect seamless support and lesser wait time, thus increasing the demand for Chatbot technology.
4. RPA (Robotic Process Automation)
Undoubtedly, RPA was the winner tech trend last year and it would continue to redefine insurance administration process. There is a sharp increase in its demand in the life insurance sector worldwide as it’s better for underwriting process, policy administration as well as claim settlements.
At the beginning of 2018, a Japanese Insurance Company, Fukoko Mutual Life Insurance, incorporated RPA system to calculate its policyholders’ payouts. It won’t take much time before other life insurance companies, too, will start installing RPA in their systems to increase productivity, fraud detection and to fasten the process of claim resolution.
5. Blockchain Technology Would Become A New Norm
Going forward, the Blockchain Technology is going to become a new norm as it has made the operational efficiency of life insurance companies significantly easier by boosting the transparency of the system. Alongside, it also ensures a seamless data transfer between the involved stakeholders.
The technological solutions of Blockchain Technology not only help in making the claim process easier and more accessible (eg. using the inputs directly from death registries) but also assist in decreasing a life insurance company’s operational expenses by automating the back-office transactions.
No wonder, life insurance companies are already flocking towards this latest tech-trend to explore its potential. Different insurers such as the AXA group, Nationwide Insurance and Penn Mutual have coupled with the Blockchain advisory council to explore and install Blockchain technology-based solutions in the coming future.
You have just gone through the 5 latest tech trends that are most likely going to disrupt the insurance industry in 2018 as well as in the upcoming years. The changing consumer behavior and their increasing demands are set to open the doors to a newer set of technologies and innovations that will be designed to value consumer security, easy accessibility and simplification of various processes.