Two years into the global pandemic, it seems nearly impossible to remember what life was like before COVID-19. In that short time, life as we know it changed dramatically and we are redefining what is considered “normal.”
Given that, it should come as no surprise that the insurance industry also experienced significant changes, particularly regarding technology. As such, we can expect technology within the insurance industry to continue to evolve in the coming year. Although it’s anyone’s guess what “normal” ultimately will mean, here are a few trends we expect will impact insurance in 2022.
The Big Accelerator: COVID-19
According to Google Trends, the global search term “uncertainty” rose approximately three times between the end of December 2019 and mid-September 2020. Without a doubt, the COVID-19 pandemic unmasked risks and uncertainties that very few individuals and companies ever considered two short years ago.
COVID-19 also forced insurance organizations and executives to think about this new landscape and how to use it as an opportunity to drive innovation. The insurance industry often has been viewed as slow-moving and reserved. Like everywhere else, COVID-19 accelerated underlying conditions and challenges, driving the industry to increasingly embrace new technologies. But is it fast enough?
The Insurance Technology Gap
With more pressure to provide tech solutions to customers as an alternative to face-to-face contact, there has been an urgency in the demand for technology. On the plus side, technology enables the insurance industry to undergo a positive transformation. This fundamental shift for the industry will allow for better customer service while improving operational efficiency – two critical components for a business today.
Much of this technology largely has been focused on the customer experience - instant service, straight-through processing, and more. But there is also tremendous opportunity and focus from insurance organizations and the people within them on how they can invest in technology to make teams and staff more effective, particularly in a world where work-from-anywhere is becoming the trend. Many companies have opted to go fully remote. In addition, some are giving employees the option to work from home permanently. These organizations need the right tools to be effective and productive, and to facilitate collaboration.
Despite the advances in technology, innovation in the insurance industry can be hampered and slowed by legacy systems, making it difficult to adopt new technologies and processes quickly. This only serves to create problems for insurance companies when dealing with younger, all-digital generations.
Appealing to consumers across the age spectrum, but particularly true of the younger generations, is the ability to handle all tasks with a mobile app. With 1.96 million apps available for download in Apple’s App Store alone, it’s easy to see why mobile apps are expected to generate more than $935 billion in revenue by 2023. To break it down further, the average American checks their phone every 12 minutes, with 88% of time on a mobile device spent on an app.
These statistics point to the critical requirement of insurance companies: development of secure, functional, and engaging mobile apps for consumers. A straightforward, user-friendly app helps customers with their requests without the need to bring in a human agent. Self-service allows insurance organizations to automate backend processes and enable more digital intake, leading to lower costs and a better customer experience.
Accenture reports that the global market for blockchain technology in insurance will grow to $1.39 billion by 2023. But what is blockchain exactly?
An alternative to cloud storage, blockchain has far-reaching applications across numerous industries. Its advantages include transparency and security. The data stored in the blockchain is decentralized, preventing corruption.
For insurance, blockchain can help insurers reduce the administrative costs associated with handling claims and verifying payments made by third parties. It provides data sharing and strong protection against fraud. All information in the distributed ledger is recorded as blocks linked to each other. This provides traceability, which helps simplify inspections. Many experts believe the full potential of blockchain technology still remains to be discovered.
According to Juniper, global AI in the insurance marketplace is expected to surpass $4.5 billion by 2026.
For the insurance industry, AI has the potential to make almost anything from customer service to fraud prevention more efficient. Today’s insurance companies are using AI to better analyze data and deliver more personalized services based on it, such as flexible contracts that meet the needs of the client. Chatbot implementation will also enhance the user experience by making it possible to process submissions, check details, and perform other common operations much faster.
An area often overlooked for AI in insurance, is information discovery and knowledge management. Both insurance carriers and agents have tremendous challenges when it comes to accessing information real-time, often hidden in thousands of documents and daily updates. AI-driven search has the potential to provide results unparalleled in speed and accuracy.
While technologies such as AI, blockchain, mobile will continue to grow in 2022, they represent just a small part of a great insurance technology ecosystem. The bottom line is that insurance companies will need to adopt new technologies to meet the needs of customers and stay competitive in the market.
Even though technology has the ability to enhance the quality of life, the one thing it can’t do is replace people, especially in insurance where being there for fellow humans in times of need with compassion and patience are vital to the industry. At the end of the day, insurance always will require human connections.
Joseph D’Souza is co-founder and CEO of ProNavigator, which provides a knowledge management platform made for insurance. He may be contacted at [email protected].