Editor’s Note: The insurance industry doesn’t always get the spotlight when it comes to discussions of technological advancements. But as a crucial part of the financial sector—and an industry that touches and impacts many others—it’s crucial that insurance not be an afterthought in the digital revolution.
The insurance industry handles sensitive customer and business data every day, and as more and more of that data is processed in the cloud, cybersecurity becomes more important than ever. At the same time, AI and machine learning are streamlining and automating simpler aspects of the insurance business, freeing up human employees to devote more attention to complex tasks and customer service interactions.
Artificial intelligence, machine learning and other technological innovations are transforming the way insurance carriers provide coverage and the way policyholders receive service—with the potential to greatly enhance carrier–customer interactions.
It’s natural to link technology and artificial intelligence to industries like telecommunications, marketing and manufacturing. In the insurance sector, perhaps not so much. Clients still receive cards in the mail, meet with agents in their offices and speak with adjusters for claims. Yet technology is transforming the way insurance carriers provide coverage and how policyholders receive service.
Technological advancements are starting to automate and predict standard insurance-related tasks, from filing a claim to adjusting a policy’s coverage. As the industry embraces things like artificial intelligence, machine learning and other technologies, the relationship between providers and clients is also changing.
More efficient processes and data analytics won’t necessarily remove the human touch. However, these advancements will increase accuracy, make information more accessible and have the potential to greatly enhance carrier–customer interaction. From the perspectives of insurance providers and clients, there are five ways tech is revolutionizing the insurance industry.
1. Artificial intelligence is providing faster claim estimates
Typically when a policyholder files an auto claim, an adjuster needs to be present to assess the damage to the vehicle. The customer initiates a claim online or over the phone and must wait for the adjuster to meet them. An adjuster looks at the car, takes note of the defects and losses, and comes up with an estimate. That estimate may take several days, extending the time from the client’s initial contact to payment.
Meanwhile, the customer is likely without their car or stuck in a vehicle with visible damage. Artificial intelligence is speeding up the time it takes for insurance carriers to provide and process estimates. Instead of waiting for an adjuster, policyholders can instantly use apps to take pictures of the damages they need to repair. An AI-based algorithm comes up with an estimate within seconds. This allows insurance companies to get money to the policyholder or repair shop in a more timely manner.
2. Telematics is determining premiums
Telematics may not be a familiar term to many insurance customers. But they may know about this emerging trend in auto insurance premiums from their current carriers. Some insurance providers send bill messages and emails touting a new technology that tracks customers’ driving habits. It’s a monitoring device that goes into a car and records a driver’s habits.
These devices are used to collect data, including locations, speeds, driving distances and accidents. Insurance carriers then factor in this information to determine individual premium costs. In theory, aggressive drivers and those who log more miles could end up paying higher premiums. Conscientious customers and those who drive less will pay lower rates. Telematics boosts risk assessment accuracy for providers and rewards drivers with good track records.
3. Drones are assessing damage
In general, the use of drone technology is on the rise across many industries. Current projections indicate the market will reach a value of more than $63 billion by 2028. Estimates also reveal the market’s compound annual growth rate from 2021 to 2028 will be approximately 16%. The insurance industry is already contributing to that growth by using drones to assess damages. Homeowners who file claims for roof or storm damage may soon be surprised to see a drone flying over their properties.
Instead of relying on roof inspectors, insurance carriers can send drones to take pictures of hail and wind damage. Using drone technology increases these assessments’ efficiency, accuracy and safety. Providers can use drones to get to areas that are inaccessible to humans after substantial storms. This technology also has the potential to capture damage from impractical or dangerous angles that humans can’t reach.
4. Machine learning is automating claim forms
Filing a claim after a car accident or major emergency can be nerve-wracking. Anxiety and shock might make it challenging for customers to remember critical details, such as the event’s time. Going over a form’s details online or with a person could be too much for a policyholder to handle and often contributes to added stress. However, insurance carriers often stress the importance of filing claims immediately.
Machine learning removes some of the burdens customers may experience during the claim process. Pre-populated forms with data from a client’s history and policy eliminate the need to repeat information. Machine learning reduces the chance mistakes will occur during the filing process and increases efficiency. Even minor claims like windshield repairs are streamlined as contractors file claims for customers using their policy numbers.
5. Social media is making customer service more accessible
No one wants to wait on hold or spend hours wondering if their insurance agent got their message. Before social media and chatbots, this was the reality for most policyholders waiting for a phone call. Asking a question, trying to take out a new policy or making changes to existing coverage could take weeks. But now that insurance carriers are on most of the top social media platforms, receiving customer service has become easier. Chatbots and email can also be ways for customers to get help when needing quick answers to things like policy and coverage questions.
Research indicates messaging now ranks second among the customer service channels consumers use. Chatbots and instant messages on social media can address routine questions about updating addresses, changing deductibles and filing claims. A customer can send direct messages on social platforms and get same-day responses. Often, carriers can provide solutions within minutes or at least get the ball rolling. Satisfaction increases as customers get better service.
Technology in the insurance industry
Technical advancements are influencing the way customers and businesses interact with each other in several industries. Insurance is one of those, as carriers integrate technologies like AI telematics and machine learning into their business models.
Providers and customers alike stand to benefit from these improvements since coverage and service are becoming more precise. Not to mention simplifying processes and increasing accessibility. Human-to-human contact will still play an important role, but technology is here to stay and will continue to play a role in upgrading the overall customer experience.
Windstream Enterprise can help your insurance business capitalize on digital transformation.
This article was written by Brad Anderson from ReadWrite and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to firstname.lastname@example.org.