How Is Technology Changing The Insurance Industry?

If you asked your grandparents about insurance, they are likely going to talk about an industry that bears little resemblance to the insurance market we find ourselves dealing with today. Of course, the insurance landscape is always changing, but the continuous advancement in technology is changing the insurance industry faster than ever before. Don’t believe us? These are the four most important ways that technology has disrupted the insurance market in recent years.

Data-Driven Underwriting

The basics of every insurance business are always the same: agents bring in money, and claims take money out. For the business to be successful, insurance agents need to bring in more money than the company pays out to their customers via claims. Big data is now one of the most valuable tools for every insurance agent.

Agents are able to use data about their customers to provide more accurate policy quotes, faster than ever before. An agent can look at a potential customer’s home history, auto-insurance records, and claims history before they even begin the underwriting process. This allows customers to get policies that are customized to their life, which makes for fairer and more accurate policies.

Technology even allows for active risk management for telematics. Many insurers offer their customers the option of putting a telematics device into their cars which tracks information like speed, distance, and time spent in the vehicle. This, in turn, allows the insurer to base their policies on this data. Data has completely transformed the way insurers underwrite policies in the twenty-first century.

Claims Experience

Historically, claims have always been the part of the insurance world that causes insurers to lose money. However, technology has actually created an insurance market where insurers can make money off of claims if they play their cards right.

Technology has completely transformed the claims process. Most insurers now offer pre-populated claims forms, which allows customers to fill out a claims form more quickly without having to answer the same question over and over. Agents can now text their customers with updates in real-time and customers can receive payment electronically rather than having to wait in the mail for a check.

Perhaps the most important aspect of the claims process that technology has changed is the way the damage can be reported. An insurer can begin assessing damages immediately if their customer takes the time to take photos and videos as soon as the damage is noticed.

Technology has made the claims experience more efficient, accurate, and easier to use than ever before. Since the claims experience is the number one priority for most insurers, we can expect to see continued advancement as insurers find innovative ways to integrate technology into their claims process. This is good news for anyone with an insurance policy.

Marketing

Years ago the insurance market was incredibly local. Most people got their policies from whatever insurer was in town. Now, the internet has globalized the insurance market. Consumers are not limited to whatever agent lives in town, they can price shop and find the right insurer for their needs. Not only do insurers have websites, but most insurance agents have their own websites as well. The internet gives consumers more options than ever before, which is good for everyone in the insurance space.

Social Media

Customer service had long been the achilles heel of the insurance industry until social media came along. Social media has revolutionized the customer service landscape, allowing companies to communicate and solve customer issues faster than ever before. Most consumers who tweet a complaint to a company expect a response within the hour. This allows insurers to stay more in touch with their customers, which leads to closer relationships between agents and consumers.

The insurance landscape is changing by the day, due in no small part to continued technological innovation. Luckily, that’s great news for both the consumer, and the insurer! Consumers can expect more personalized policies, while insurers can use data to make smarter business decisions. It’s truly a win-win.