The Technological Era of Insurance Industry

Insurers are slowly opting for the technology tools that prove to be advantageous for them. Technology can reduce challenges related to cybersecurity threats through accurate predictions.

Apac CIOOutlook | Monday, April 13, 2020

Insurers are slowly opting for the technology tools that prove to be advantageous for them. Technology can reduce challenges related to cybersecurity threats through accurate predictions

FREMONT, CA: The modern-day technologies like machine learning, artificial intelligence (AI), and chatbots have brought revolutionary changes in the insurance industry landscape. Some facial recognition software can now even analyze how well a candidate for life insurance will age. A number of frauds and crimes can be evaded at ATMs and self-checkout counters using the facial recognition technology. Similarly, emotion recognition technology promises to prevent insurance fraud by building upon facial recognition. Based on a person's voice signal and word usage, agents can recognize their emotional state that may help the agents and insurance carriers to measure the intensity of risk they are dealing with while better serving consumers. These technologies have also posed a question about whether robots will soon replace insurance agents.

Gone are the days when carriers relied on the agent's gut feeling to determine risk based on their personal knowledge and predictions. A lot of things have changed now. Carriers now have more precise, sophisticated predictive model and thus no longer allow their agents to deviate from set pricing. Insurers are slowly opting for the technology tools that prove to be advantageous for them. Technology can reduce challenges related to cybersecurity threats through accurate predictions. Chatbots provide 24/7 assistance to the customer, which results in a higher retention rate among the customers.

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It is a proven fact that insurance companies are lagging behind in the adoption of automation compare to banking and financial services. Insurance agents were the face and brand of traditional insurance companies or carriers. With the introduction of technology, carriers are experimenting the technological tools to increase direct interaction with clients. It doesn't mean that agents have stopped interacting with clients over the phone, internet, or in person. Insurance companies have already started working with insurtech companies to enhance the quality of insurance services and jobs as well. Lately realizing the potential of technological tools like Robotics and AI, insurance companies are embracing them. But, that surely is not going to replace the agents. Automation can only make the claims processing and document verifications simpler. Agents with skills in data analytics and machine learning will find themselves fit in such scenarios.

The new customer-friendly technology has the goal of creating an impactful experience for customers when buying insurance. Though AI gets smarter with its smarter use cases in the insurance sector, machine learning is still in its infancy stage. AI-powered chatbots can now answer a wide range of common queries posted by customers. Companies can operate by scaling down the number of customer care representatives. For example, if a customer needs information about the card or has a question about a bill, they can get a quicker response from the chatbots than a live agent. They no longer need to wait for the call to get connected. Robots can assist agents by performing data mining and help them find meaningful patterns and correlations for a better decision making process.

The only limitation with chatbots is that they cannot give expert advice about setting limits based on an individual's exposure to risk. Chatbots also cannot provide information on offered services and products in detail. They cannot give much information about the carrier too. It does not mean that machine learning will not be able to gain the sophistication to carry out these things performed by AI, but will take little more time, by 2033 or so. Like humans, who are trained over a while, these technologies will also evolve over time through trial and error.

Check out: Top Insurtech Startups

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