Three Benefits Insurtech Has Brought to the Insurance Industry
Artificial Intelligence (AI), machine learning, and the Internet of Things (IoT) may all sound like words from a foreign language, but these are all insurtech benefits that are becoming common aspects of the insurance industry.
Insurtech is where insurance and technology come together and its goal is to create processes, programs, and tools that players in the insurance industry can use to increase productivity and customer satisfaction. Three of the most prominent insurtech benefits that have been brought to the insurance industry are AI, machine learning, and the IoT.
1. Artificial Intelligence
With artificial intelligence, humans can program computers to perform tasks like humans. These are redundant tasks that humans can better spend time on completing something else.
One of the biggest uses of AI in the insurance industry is chatbots. A chatbot is an application used to conduct online conversations through voice or text and is available to customers 24/7.
Chatbots guide customers through the process of filling out an application, a claims report or troubleshooting a problem. Since chatbots can help customers through these simple processes, employees are free to perform more value-adding tasks.
Another important form of Artificial Intelligence in the insurance industry is the use of Optical Character Recognition (OCR). This technology scans documents and transcribes the information into character codes that can then be read by the machine.
Using OCR automates the manual process of checking COIs by having the software scan documents and make sure requirements are met.
2. Machine Learning
The difference between machine learning and AI lies in the machine’s ability to detect patterns and make predictions. With AI a machine is only able to perform what it’s programmed to do and make decisions based on data it receives. With machine learning, computers use data and analytics to look at underlying trends to build knowledge and make predictions.
Machine learning is beneficial to the insurance industry because insurance agencies get substantial amounts of data and humans can only process a small amount of it. Insurance agencies can use more of the data they collect and analyze it for several things by implementing machine learning algorithms.
Listed below are some of the benefits machine learning has brought to the insurance industry:
- Determine insurance premiums with greater accuracy.
- Predict future risks and losses.
- Predict demand for future products.
- Check the accuracy and correctness of data.
- Automate the claims process.
- Detect fraud.
3. The Internet of Things
The IoT is the connection of computing devices in things like your car or smartwatch.
The IoT has brought a new concept to the insurance industry, telematics. With telematics devices can check, store, and send data from devices found in the IoT.
The best example of the use of IoT and telematics in the industry is car insurance. Many insurers give their customers the choice to download an application onto their phones to check things about their driving like speed, braking, and acceleration. When a customer downloads this application and proves to the insurer they are meeting goals and staying safe, customers see benefits in the form of lower premiums or other rewards.
Insurance agencies can be more competitive with pricing by using the IoT and telematics to track what customers are doing and adjust premiums depending on their level of risk.
How is Insurtech Reshaping Insurance?
AI, machine learning, and the IoT are contributing to some of the greatest advancements the insurance industry is seeing. By using these technologies, the insurance industry is improving values for its customers by addressing issues of customer demand, becoming more efficient in processes, and reducing costs in the industry.
If you’re interested in using AI to streamline your certificate of insurance tracking process schedule a free, customized software demo to learn how you will benefit from SmartCompliance.