Where insurtech and human interaction meet
Discover how insurtech can support agents, brokers and carriers alike while streamlining processes.
Insurtech emerged around 2010, according to Investopedia, and similar to the technology used widely in the financial industry (fintech), insurtech takes digital-based capabilities — for which the slower-moving insurance industry has been long overdue — to the next level.
Some examples of insurtech applications are machine learning (ML), artificial intelligence (AI), blockchain and the Internet of Things (or IoT). These applications offer capabilities and solutions that are more commonly applied in and associated with online insurance applications, quotes and policy management, chatbots, claims reporting and payment processing — to name just a few.
Over the past decade, we have seen the insurance industry gradually increase its adoption of new digital technology to better meet the instant online needs of consumers who, like with any other industry, are demanding speed, convenience and transparency when it comes to working with their insurer. For the insurance industry, having technology that can scale and update with these changing demands can help insurers stay ahead of the competition.
Helping, not replacing human interactions
Despite the increased adoption of digitally enhanced capabilities and the growing list of proponents for automating certain processes, some skeptics have concerns regarding the impact on humans in the workplace. Those in opposition feel that this new technology is focused entirely on improving processes by replacing humans with machines, which is simply not the case. In fact, a key value proposition of insurtech is that it enhances and streamlines processes, making it easier for humans — such as carriers, brokers and wholesalers — to focus less on processes and more on personalizing the overall insurance experience for clients and policyholders.
For example, AI is frequently being used in combination with other systems, such as claims processing. By streamlining processes, AI can help alleviate an adjuster’s backlog of claims by allowing a policyholder to immediately report a claim online, as well as track the status of a claim. By removing any excessive human intervention at the start, a claim gets in the system sooner. This allows the adjuster to bypass initial and routine processing steps, freeing up time for handling additional claims.
When you think about the influx of claims after a major catastrophe, this technology not only makes it easier for underwriters to manage claims but also expedites claims processing by pushing more claims expeditiously through the system and getting payments issued quicker to those who need them. It can also help reduce the administrative costs of claims.
Other applications that are providing benefits to insurers include chatbots (driven by AI) that can respond to initial internal agent inquires and algorithm data (driven by machine learning) for identifying areas, such as customer service, fraud detection and operational efficiency, that need improvement. This data can also be helpful in the development of new products and services by performing a fine-grained analysis based on an individual policyholder’s behavioral patterns, such as what the person wants and needs.
Without understanding the holistic nature of insurtech and its various applications, it’s no wonder that some companies continue to view the entire process as competing with or even replacing human intelligence. The reality is many applications are designed to work in tandem with humans, helping save valuable processing time in areas such as assessing accidents, identifying discrepancies in billing, and allowing consumers to view and manage policies and billing anomalies online — to name a few.
An estimated 50% of the workload in the insurance industry involves collecting and processing information. This leaves experts to believe there is potential for technology to automate nearly 43% of a worker’s time. When applied correctly and augmented with human intelligence, processes and workers’ skills are enhanced by building on already established capabilities.
As 2022 approaches, we are sure to see more companies make the investment in new technology as they look to lower costs, create a better customer experience, and improve efficiency by reducing workers’ processing loads.
Brad Nevins is co-CEO of Direct Connection Advertising & Marketing and has more than 35 years in the property & casualty insurance industry. He can be reached at brad@directconnectionusa.com or (707) 759 5391.
This article originally appear on Direct Connection Advertising & Marketing blog and is reprinted here with permission.
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