Insurtech: Advancing the Industry Through Technology
InsureTech or InsurTech or insurtech—It seems the industry has not yet decided on the preferred spelling, but it is the latest insurance buzzword and similar in meaning to fintech.
As fintech is shorthand for “financial technology,” insurtech refers to “insurance technology,” and its use is changing insurance operations for the better in three key areas:
- Improving efficiencies and lowering costs
- Enabling the development of new products and the tapping of new markets
- Enhancing the customer experience
The adoption of insurtech has to be done gradually and thoughtfully, of course. And the goal of technology initiatives should not be to replace team members, but rather, to free them from mundane tasks and make better use of their skills and experience. But the potential insurtech has for improving insurance operations and interactions is unmistakable.
Increasing Efficiency to Lower Costs
Implementing new technology when and where it makes sense is essential to the ongoing ability to offer cost-effective insurance products. This is not a new concept, of course. Insurance, like every industry, has embraced new technology through the years, from the telephone and fax machine long ago to today’s videoconferencing and virtual meetings.
What’s next? Continuing advances in artificial intelligence (AI) and machine learning will help automate processes like reviewing, categorizing and digital filing of documents. One can envision a time in the not-too-distant future when a customer files a claim by uploading the necessary documentation and then a complex algorithm assesses the claim and authorizes payment with little human input. These advances, along with blockchain technology, will be used in automatic
fraud detection.
These are just a few examples. There surely are other efficiencies and cost savings to be gained through the use of insurtech. With all new technological advances, and especially in the connected online world in which we now live, we must keep ahead of those who would try and use these technologies criminally. We must keep ahead of those players and make sure at the forefront of all our improvements is the continued mitigation of cybersecurity risks.
Enabling New Products and Opening New Markets
At Global Aerospace, we pride ourselves on being at the forefront of supporting aviation innovations. Consequently, we serve a very diverse customer base with a wide range of needs. Insurtech has enabled
and simplified the offering of tailor-made products that empower customers by giving them more control and choice.
On-demand products are one example. It’s common today for aviation stakeholders to want insurance only for the period of time they are using an insurable product, such as with drone missions or aircraft rentals. Enabling a customer to quickly, easily and wisely choose coverage options and duration using insurtech is increasingly important.
Needless to say, “wisely” is the biggest challenge of the three. But with AI helping to guide customers in their selection so that they don’t purchase the wrong level of coverage or overlook important coverages, a self-help approach is certainly achievable. And when it is achieved, new markets become available to insurers.
Enhancing the Customer Experience
Beyond efficiency and new products, insurtech has the potential to enhance the customer experience. The purchasing and using of insurance products often are perceived as confusing, time-consuming tasks. But insurtech can make these activities more intuitive and faster, and consequently, leave customers pleasantly surprised at the simplicity of these processes.
Such a result benefits both customers and insurers. Customers enjoy more stress-free interactions, and, as a result, insurers can expect an increase in customer loyalty and an expansion of their customer base.
Ultimately, today’s insurtech advances are here to stay. What remains to be seen is how well insurers use them to their advantage and their customers’ benefit.