5 disruptive technologies that are transforming the Insurance sector

The insurance sector in India is on the cusp of undergoing a major overhaul perpetuated by disruptive technologies that are birthing innovative and efficient solutions. Customer needs are becoming increasingly nuanced and complex. Additionally, the millennials are more knowledgeable about their choices and are increasingly spending a great deal of their time and energy in the digital realm. Forward looking insurers are adopting technology to provide personalised offerings and tailored communication that can help them optimise customer interactions.

In order to sustain and grow in a rapidly digitizing world, it is imperative that the insurance industry adopts emerging technologies and leverages them optimally to redefine themselves. Top trends that are transforming the insurance sector are:

Artificial Intelligence is a disruptive technology that designs and programs intelligent machines to think and work like humans.

AI is being leveraged to better evaluate risks and enhance the underwriting process to achieve greater accuracy and provide the customer with a more suitable pricing structure. Machine learning tools are also being used to identify suitable insurance offers for customers that better reflect their requirements and allow them (insurance customers) to customize their insurance policies. Additionally, AI-driven chatbots that interact with customers are slowly becoming ubiquitous.

Big Data basically refers to voluminous data that is extremely difficult to store due to its growing size and can be analysed computationally to reveal patterns and trends.

Insurance companies are the guardians of large amounts of data. Instead of managing this data in silos, companies can upgrade their data management systems to leverage the power of analytics. While Big Data technology stores and retains huge volumes of structured and unstructured data, analytics can help insurers sift through reams of data to arrive at valuable and actionable insights.

Cloud has become a preferred model as it offers businesses the benefit of cost-effectiveness, high security and easy deployment.

Storing and managing data, especially for operational tasks can be cost ineffective. Insurance companies can use the Cloud to carry various tasks like premium billings, claims processing and policy management. This could help them in reducing server cost and augmenting operational efficiencies with minimal human intervention.

Blockchain or the Distributed Ledger Technology (DLT) cryptographically records transactions that are protected by digital signatures. Transactions recorded on the DLT are highly secure, traceable and immutable. This makes it highly resistant to fraud and data manipulation.

The insurance industry can use blockchain technology to store and validate client information, and identify fraudulent activities like false claims and approvals. Due to its immutability, transactions recorded on the blockchain maintain their sanctity and can thus potentially make the overall insurance journey more transparent and secure.

Sensory technology that is embedded in wearables and other daily objects can accumulate huge volumes of data that can be analysed to derive actionable insights and create personalised offerings to customers. Many insurance providers are already using data collected from wearable health and fitness devices to offer tailored health insurance products to users.

In a world that is slowly but surely migrating to the digital realm, insurance companies that can embrace latest technologies while staying tethered to the goals of trust and risk mitigation, are likely to stay ahead of the pack.