If you’re working in the insurance industry, you will probably have felt the winds of change in the past few years. The industry is evolving fast, with new young insurtech players entering, and traditional insurance companies pivoting their strategy, tone, and products to better fit the needs of consumers. A lot has been happening.
To be able to keep up with all of that, focus is required. Companies in the insurance industry have to find ways to be able to zoom in on customer service and strategy and let go of as many repetitive tasks and slow systems as possible. The answer to all of that is automation. In this article, we’ll dive into why it’s such a crucial step to take for these companies and explore ways they can leverage the power of automation, AI, and Machine Learning.
Too busy to read? You should consider automating some things. But in the meantime:
TL;DR
- Automation is revolutionizing the insurance industry, streamlining processes like underwriting, policy servicing, and customer queries.
- Surprising uses of automation in insurance include fraud detection, improved customer service with chatbots, and predictive analytics for informed business decisions.
- Future developments include hyper-automation, personalization of policies at scale, and automated compliance with regulatory standards.
- Claims processing is being streamlined using automated systems for quicker evaluations and improved customer satisfaction.
- Automation aids in customer outreach, providing timely reminders, payment alerts, and personalized policy recommendations.
- Automated underwriting systems enhance risk assessment and premium calculation, leading to more competitive rates.
- Automation significantly contributes to data security by continuously monitoring network activity and applying patches and updates automatically.
- Insurance companies must prepare for the automated future by reskilling and upskilling their workforce, integrating automation technologies, and fostering an innovation-friendly culture.
- The shift to automation is not just technological but also about creating a more efficient, resilient, and customer-focused industry.
Why the Insurance Industry Needs to Prioritize Automation
Companies that are standing still in the sense of technological innovation might as well be moving backward. It’s not just about keeping up to speed with the latest tech though. Automation Technology is becoming increasingly crucial for improving efficiency, but also for remaining competitive in a hyper-dynamic market. Here’s what’s happening.
1. To survive in a competitive, changing landscape
Insurtech is changing the insurance space. These new entrants are often lean and flexible start-ups who can move quickly because they have embraced technology from day one. They’ve built their operations on them and can benefit from AI-driven processes. This allows them to provide better, seamless, and personalized customer experiences. Yes – technology is making industries more human than ever before.
Traditional insurers may find themselves struggling to compete with these insurtech companies – especially if they’re missing the mark with millennials and Gen Z. To give you an idea of just how quickly the landscape is changing: worldwide, the InsurTech market size was valued at a whopping USD 5.45 billion in 2022. Not only that: predictions are, that it will grow at a compound annual growth rate of 52.7% from 2023 to 2030.
So if you find yourself working for any of the more traditional, somewhat sluggish players – it’s time to step up your game and create focus. By automating manual tasks and routine processes, these companies can focus their resources on strategic initiatives, such as improving their digital platforms, developing new products, and enhancing customer engagement strategies. It can help bridge the gap that’s growing bigger.
2. To keep up with a shift in customer expectations
Consumers are expecting different things from their insurers now – and they’re more vocal about it, too. With more players to choose from, they can become pickier, and clearly define their demands.
They are more tech-savvy and better informed than ever. What they want more than ever is transparency, speed, and convenience.
Traditional products and ways of selling and handling insurance are no longer meeting these evolving expectations. The modern customer wants their insurance to be personalized. They want to set it up quickly, with a hassle-free service, and they want the ability to easily interact with their insurer. In other words: they want a great digital app and a smooth web and customer service experience.
Automation and digital platforms cater to these preferences. For instance, chatbots can provide 24/7 customer service, AI-driven underwriting can enable instant policy issuance, and mobile apps can allow customers to manage their policies and file claims at their fingertips.
3. To drive innovation
As we said before: automation isn’t about substituting human effort – it’s actually about augmenting human capabilities.
By freeing up the time and headspace of your team, they can work on other areas that require human ingenuity. They could be developing more and better insurance products. They could have the time to come up with truly creative marketing strategies. And they could build solid customer relationships.
By relieving them from their mundane tasks, automation allows them to create something new and unique much easier than ever before.
Ways Automation is Being Used in the Insurance Industry
Ready to explore all the ways automation is changing the insurance industry? Here’s how it is being used.
1. Insurance automation is taking over fraud detection
One of the most obvious ones is fraud detection. In the US, the total cost of insurance fraud, excluding health insurance, is gauged to be more than $40 billion per year.
With automation and AI, insurers can identify suspicious activities and patterns much more efficiently, letting the machines dig through the piles of data. For them, it is much easier to identify unusual behaviors or inconsistencies that may hint at fraudulent activity.
2. Automation is enhancing customer experiences
With the help of chatbots and virtual assistants, insurers can provide 24/7 customer service. These automated tools can handle routine queries, provide policy information, and even assist in filing a claim. This not only increases customer satisfaction but also frees up staff to handle more complex inquiries.
But it can also help people find the right fit for their insurance needs quickly. Let’s say someone is trying to insure a log truck. With automation, AI, and personalization, insurance companies can not only give better recommendations – but they can also predict needs and upsell useful products in addition.
3. Automation is predicting the future – sort of
In those vast amounts of data that insurance companies are collecting, they could find a lot of patterns. If only someone had the time and brain power to go through all of it and find them all.
It’s incredibly helpful to let automation tools do the job. It enables insurance to analyze historical data, predict future trends, and make data-driven decisions. For insurers, this means predicting potential risks, customer behaviors, and market trends, ultimately leading to more informed business decisions.
4. Claims processing is being automated
It’s time to reimagine the claims processing operation. This traditionally requires significant time and resources, and it famously frustrates customers.
That no longer needs to be the case, as insurance automation is revolutionizing the process. Automated systems can quickly evaluate claims, validate policy details, and even process payments, dramatically reducing processing times and increasing customer satisfaction.
For example, some insurers have introduced mobile apps that allow policyholders to submit claims using just their smartphones. The app uses AI algorithms to assess the damage from uploaded photos and calculate the payout amount. This form of automation brings transparency and speed to the claims process, which were often major points of concern for customers.
5. Customer outreach is being automated
Nothing is more frustrating than getting delayed messages and reminders on your policy. Maybe there is something worse: if the messages are vague and hard to understand.
With a combination of insurance automation and AI, send timely policy reminders, alerts for payment due dates, and personalized recommendations based on policyholders’ profiles.
Automated email marketing campaigns can provide customers with relevant and personalized content, driving engagement and improving retention rates. The AI can be used to translate text-heavy documents and contracts to easy-to-read lists, making sure customers know what is happening.
6. Insurance automation of underwriting and risk assessments
Another slow, yet critical process in the insurance world is underwriting. Automation can make a significant impact here, and drastically improve the relationships with your customers at the same time.
Traditionally, this process of underwriting and risk assessment involved manual data analysis to assess risk and determine premiums, which is time-consuming and very prone to human error.
Today, automated underwriting systems can quickly analyze large volumes of data, including information from third-party databases, to calculate risk and set appropriate premiums. Not only does this reduce underwriting times and improve accuracy, but it also enables insurers to offer more competitive rates.
What will Automation do in the Insurance Industry in the Future?
Imagine hyper-automation, personalization, and even compliance at scale – it will be there sooner than you think. Tools like Comidor’s Low-Code Automation Platform will allow insurers to automate even the most complex processes, offering an all-in-one solution for streamlining operations and improving efficiency.
Data security, automation, and insurance information
It’s all looking great for companies ready to adopt automation. However, it is necessary to stress the importance of data security when we’re talking about automation and insurance. Insurance companies are dealing with large amounts of personal information, so data security is key. Keeping up with the latest rules and checking your systems is crucial. Luckily, AI can also help you keep your cybersecurity strong.
Prepping for an automated insurance landscape
Ready to transform the way your team works with automation? It’s again important to focus on how much this is about humans, not just about technology. You will need to prepare your organization for the change, reskill your workforce, and foster a culture that embraces innovation. Happy automating!
Embrace automation today and unlock a world of time-saving possibilities!
