The insurance industry is rapidly changing, and the companies that keep up with these changes will be set up for success. Insurtech is a significant aspect of the modern insurance industry, giving certain companies a competitive advantage driven by cheaper prices, efficient service, and robust customer experiences. In this blog, we will explain the basics of insurtech, how it differs from traditional insurance software and the top benefits of utilizing this new technology.
What is insurtech?
Insurtech is a combination of the words insurance and technology. Insurtech is a subset of financial technology (FinTech), relating to the use of technological innovations to improve the efficiency of the insurance industry. Insurtech includes the use of technologies like artificial intelligence (AI), augmented reality (AR), big data analytics, and the internet of things (IoT). These technologies make insurance products more tailored to customer needs, competitive, and easy to use. Insurtech is transforming the insurance industry, empowering customers to take more control over their experience.
How does insurtech differ from traditional insurance?
Traditional insurance companies may use technology, but often these legacy systems are isolated, inflexible, and outdated. On the other hand, insurtech is rooted in transformative change. Insurtech solutions are innovating and disrupting the traditional industry processes, from underwriting and pricing to claims management and the customer experience. Using insurtech solutions enables companies to cut costs and maximize profits while charging customers competitive prices.
Insurtech Trends Driving Industry Change
The rise of insurtech has been driven by several factors in the insurance industry. As customers have increasingly begun to expect streamlined, accurate, and transparent experiences, insurance technology has adapted to meet those needs. In addition, as insurance companies have looked to optimize costs, schedules, and forecasting abilities, solutions have grown to provide these abilities. For instance, the use of AI and ML in software has enabled advanced scheduling and reporting. With insurtech, companies can now utilize AI-driven adjuster scheduling and route optimization. Likewise, they can also leverage big data and analytics to identify redundant or needless costs as well as more accurately forecast future demand. Customers can also access AI-driven chatbots or virtual assistants to drive their customer experience, while streamlined on-demand insurance policies make it easy to get started. With IoT devices, insurance companies can access customer data remotely, removing the need for time-consuming processes like redundant visits. All of these customer and company trends have given rise to insurtech solutions, likewise, these solutions provide several benefits to both customers and insurance companies alike.
Benefits of Insurtech
Simply put, insurtech is changing the way insurance is done. Traditional processes are being completely redone to reduce redundancies, streamline access, provide transparency, optimize resources, and become customer-centric. Let’s take a look at the top benefits of using an insurtech solution.
Insurance companies and customers both benefit from efficiency. When companies use an insurtech solution to optimize processes and cut costs, they can provide competitive rates for customers while continuing to maximize profits. Cost efficiency is a win-win for everyone involved. Utilizing a high-quality insurtech solution like ServicePower’s has helped insurance companies realize 12x annualized ROI. At the same time, companies can provide customers with competitive rates that build loyalty and retention.
- Personalized Insurance Policies
Insurance policies have a reputation for being clunky and complicated, while the overall claims process could be faster and more robust. Insurtech is helping improve these issues. Instead of calling and waiting on hold to find out critical policy information, customers can easily access the most relevant information for their specific needs via a mobile application. Using an AI-driven mobile app also enables companies to provide customers with personalized policies and streamlined procedures. This helps customers get what they want in the fastest way possible, without sacrificing additional resources for time-consuming calls and administrative tasks.
- Dynamic Customer Experience
Insurtech solutions have customer-centric features that ensure your company always provides customers with a positive experience. For instance, a self-service customer portal empowers policy holders to self-schedule appointments, upload pictures and descriptions for the first notice of loss, and receive real-time status updates. With ServicePower’s insurtech customer portal, companies benefited from a 27% improvement in net promoter score and a 30% improvement in customer satisfaction ratings. Research has proven that 86% of customers will quit doing business with a company due to a negative experience, which means continuously improving your customer experience is critical to succeeding in the competitive insurance industry.
In addition to an empowered and positive customer experience, customers increasingly expect insurance companies to be transparent and trustworthy. Demonstrating this can be challenging without the right tools, but an insurtech solution makes it easy. Customers have visibility into the real-time status of their claims and payments, so they’re always in the know. With information enablement, customers do not have to worry about hidden costs or unwelcome surprises, improving transparency and trust.
- Faster Adjuster Payment Processing
Lastly, utilizing an insurtech solution significantly improves the speed of adjuster payment processing. Once a policy holder schedules an appointment, the AI-driven scheduling feature optimizes the latest schedule and provides the optimal routes for arriving at the appointment on time. The adjusters can use the mobile app to access vital information, update their status and even submit invoices for expedited processing and payments. Using ServicePower’s insurtech solution, customers have benefited from a 13% increase in average weekly claims completed with a 20% decrease in turnaround time after the first notice of loss.
How can businesses adopt insurtech solutions?
Now is the time for businesses to adopt insurtech solutions, and doing so is easy. While there are numerous options available, only a select few are innovative and flexible enough to build a customer-centric experience, drive growth, and maximize ROI. Trying out an insurtech solution yourself with a custom demo is the most valuable way to assess if it's the best fit for your business.
Embrace digital transformation and try ServicePower’s insurtech solution today.