The insurance sector is a dynamic market that continuously evolves due to technology, policyholder demands, and legislation. To stay competitive and provide optimal service, insurers must adapt to these changes. Comarch, a global IT business products provider, explores several trends shaping the insurance claims landscape.
Digital transformation is far from over in the insurance industry. Insurers are increasingly leveraging digital technologies to enhance operations and improve the policyholder experience.
Many insurers now offer user-friendly web and mobile platforms for requesting quotes, purchasing policies, filing claims, and checking claim status.
Embedded insurance, which allows customers to buy insurance at the point of sale for another product, is also gaining traction. These digital advancements streamline operations, improve efficiency, and enhance the customer experience.
Digital platforms are crucial as digital policyholders prefer managing policies and interacting with insurers online. Companies like Comarch Insurance provide InsurTech software that helps insurers modernise and simplify the claims process.
The impact of AI
Artificial Intelligence (AI) and machine learning have revolutionised the insurance sector’s risk assessment capabilities.
Recent advancements in AI enable insurers to use these technologies for claims processing and underwriting. AI can analyse large data sets to identify patterns and gain valuable insights, helping insurers predict risks and offer personalised premiums.
AI-driven claims systems also simplify and speed up claims processing, making it more efficient than traditional manual methods. Additionally, AI allows insurers to provide customised insurance offerings, catering to the growing demand for tailored insurance solutions.
Insurance companies collect data from various sources, such as claims data, client demographics, economic conditions, geospatial data, IoT devices, and social media, to predict risks and enhance risk prevention.
They use AI and machine learning to analyse this data and develop predictive models. These models assign risk scores to policyholders, which determine their premiums.
AI’s predictive capabilities are particularly beneficial in preventing losses. For example, health sensors can alert users to potential health issues, and smart-home technology can detect fire hazards.
These preventive measures protect policyholders and reduce the likelihood of costly claims.
Emerging technology
Emerging technologies also drive trends in insurance. The growing demand for cyber insurance, driven by the increasing risk of cyber breaches and ransomware attacks, is one such trend.
Insurers can now use telematics to assess driver behaviour in real-time, optimising usage-based insurance policies.
The use of drones for property evaluation is another trend, enabling insurers to capture high-quality images quickly and safely, which can impact premiums.
New policies
In 2024, global insurers must navigate new privacy laws and enhance their cybersecurity measures to comply with regulations like the General Data Protection Regulation (GDPR) and the California Privacy Act (CCPA). Ensuring the security of sensitive customer data is essential for compliance and to avoid significant fines.
Despite significant advancements, insurance leaders face challenges in 2024. Climate change poses a substantial risk, with natural disasters becoming increasingly costly to insure.
Additionally, there is a talent gap in areas such as cybersecurity, digital transformation, and data analysis. Finding and retaining skilled professionals in these fields is challenging but crucial for insurers to stay competitive.
As the industry progresses through 2024, insurers must innovate and adapt to new regulations while attracting top talent.
The integration of Environmental, Social, and Governance (ESG) policies and the use of AI for forecasting and product personalisation are key strategies.
Insurers must also reconfigure their operating models to adapt to market disruptors and incorporate new technologies to remain at the forefront of the industry.
Read the full blog from Comarch here.
Keep up with all the latest FinTech news here
Copyright © 2024 FinTech Global
