Adopting a holistic future-led digital mentality is necessary to thrive in the insurance sector, as it offers clients a unique user experience; this entails keeping abreast of insurance industry developments, including insurance management software solutions and digital insurance platform trends.
Here are the digital insurance solutions Cardinal predicts will emerge in 2023, ranging from insurance digital transformation and automation to IoT and chatbots.
Distributed Architecture
Many of the main business activities of the world's insurance carriers still rely on on-premises legacy technologies, resulting in enormous technical debt. As more business operations migrate to the cloud, insurance companies can design and market new products more quickly and affordably.
Furthermore, insurance companies can collect, store, and analyse vast volumes of client data, such as tens of thousands of claim data points. As global ecosystems continue to evolve, cloud-native insurance providers will be positioned as central hubs for clients, carriers, healthcare providers, automobile providers, innovative home device distributors, etc.
Digital Transformation
In 2022, data centre segments globally were expected to spend $255 billion on technology and IT services, highlighting the impending tsunami of digital transformation. Consequently, proactive insurance providers have started building new capabilities at each customer touchpoint, including customer assistance, claims management, transactions, and advancements to the entire customer experience.
Cardinal believes insurance service providers will gain confidence and invest in digital transformation to give policyholders an outstanding customer experience, as the business benefits of digitised insurance services become more generally recognised throughout the insurance industry. Consumers are engaged on numerous digital channels and have grown accustomed to streamlined user experiences; they expect the same while browsing for insurance plans.
Automation within the Insurance Industry
As with other industries, integrating automation in the insurance industry can facilitate efficient, scalable, and rapid business processes.
For this reason, robotic process automation (RPA) is perfect for optimising various insurance-related processes, including claims administration, automated payments, compliance management, underwriting, and policy management.
Notably, ZhongAn, one of the top insurance companies in China, has automated underwriting by 99%, and claims settlement by 95%. These statistics demonstrate that automation is a sensible method to streamline insurance industry processes beyond 2023.
Robotic Process Automation
With the insurance industry's intricate integration of the newest technology and the ever-changing mix of systems, repetitive and manual procedures are great candidates for Robotic Process Automation (RPA). In addition, due to the increasing pace of mergers and acquisitions in the insurance business, parent firms are seeking innovative ways to convert existing manual procedures into time-efficient automated processes to improve process efficiency.
RPA provides the optimal solutions for enhancing the operational efficiency of insurance companies by automating repetitive business operations using a software bot, hence removing the need for human intervention.
Low/No Code Development
To remain competitive, insurance companies' business operations must be efficient enough to manage complicated platforms, deploy updates quickly and at scale, and introduce new products as soon as possible. Low code/no code development enables the configuration, development, testing, and maintenance of insurance apps to be streamlined and resilient, increasing productivity and enhancing user experiences.
Artificial intelligence (AI)
AI is significantly impacting the insurance industry and is one of Cardinal’s highlighted upcoming trends. AI is transforming insurance operations such as underwriting, pricing, and claims. It is also one of the areas where rigorous R&D is carried out to improve other business processes, such as decision-making, cost optimisation, and customer experience.
Detecting fraud is another critical area where insurance firms utilise AI. Insurance businesses can reject fraudulent transactions and flag them for additional investigation by incorporating AI into their existing business processes.
Forecasting Analytics
Insurers and distributors can do significantly more with their data in 2023. This is especially crucial for sales and underwriting, where data can be processed by the sales team using AI and ML. Insurers can choose the best insurance policies and programmes for individuals and organisations during the quoting phase, speeding up the sales process. Insurance businesses can collect client data using predictive analytics to better understand and forecast their behaviour. Additionally, predictive analytics can identify fraud concerns, triage claims, forecast trends, etc.
Adopting predictive modelling and analytics has improved insurance firms' revenue models. According to a noteworthy study by Valen Analytics, insurance companies that used predictive analytics boosted their direct written premiums by 53% and lowered their loss ratios by up to 9%.
Insurance Connected to the Internet of Things (IoT)
The connected insurance model is an evolution of the traditional insurance paradigm. Connected auto insurance is one example of behaviour-based premiums. Benefits for insurance carriers include improved driving behaviour, decreased fraud, decreased operating expenses, enhanced customer experience, and so on.
Most insurance policyholders are willing to give additional personal information in exchange for premium discounts. IoT can automate data collecting from smart homes, smart fire alarms, fitness trackers, vehicle sensors, etc., to better assess rates, reduce risk, and prevent losses. IoT will improve risk assessment, enabling insurers to influence policy pricing directly, and boost insurer accuracy and revenue.
Chatbots
Chatbots execute the majority of client interactions for digital enterprises nowadays. Through AI and ML, chatbots may engage with customers without human interaction. Insurers can save time and money using chatbots instead of a full-fledged customer service department. A bot can fill out customer policy and claim forms, freeing up staff for more complex tasks.
Conclusion
To summarise, following the latest trends in the insurance industry allows insurers to stay ahead of the competition and match the most current client expectations. Technological advancements will permanently reshape the insurance business, generating innovation opportunities.
Cardinal is a significant contributor to the digital transformation of major insurers, enabling them to provide exceptional client experience. Our innovative group of insurance software solutions and insurance technology solutions focus on crucial areas that are essential in all insurance businesses.
Cardinal's portfolio of insurance management software solutions and unmatched track record have made it the technology partner of choice for insurance companies.
For more information on Cardinal’s insurance-industry-specific testing services, and /or products, services, and solutions, get in touch today.
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