Category: Insurtech

Key takeaways:

• Graph Databases: Utilizing graph databases has revolutionized the insurance industry, enabling advanced analyses crucial for profitability.
• Analytics Evolution: Shifting from descriptive to predictive and prescriptive analytics enhances decision-making and risk assessment.
• Big Data Utilization: Analyzing vast amounts of data helps insurers better understand customer behavior, manage relationships, and identify patterns critical for success.
• Digital Transformation: Leveraging data analytics enables insurers to make informed decisions, improve efficiency, and enhance customer satisfaction.

In an ever-evolving technological landscape, the insurance industry faces dynamic challenges and opportunities. A multitude of insurance options is now available worldwide, leaving clients with perplexing questions about choosing the right insurance provider:

1. Is this company reliable?

2. Will they offer the best rates?

3. What is their market reputation?

Similarly, insurance companies grapple with uncertainties about customer behavior, fraud detection, policy risk assessment, and claim certainty. Directly engaging with customers and providing online policy issuance took years to become the norm, with some companies yet to catch up.

Graph Database: A Game Changer

The introduction of graph databases, utilizing a semantic structure with nodes, edges, and properties to represent and store data, has transformed the industry. This technology enables advanced mathematical and financial analyses, enhancing our understanding of customer behavior and risk costs – crucial for the industry’s profitability and stability.

Shifting from Descriptive to Predictive and Prescriptive Analytics

Traditionally, insurance companies primarily focused on descriptive analytics, examining past events. However, the industry’s demands have evolved to include predictive analytics, which forecasts future trends, and prescriptive analytics, which suggests actions to influence outcomes.

Harnessing Big Data

The abundance of data in the insurance sector makes it an ideal candidate for data analytics. Analyzing this data helps construct essential patterns, gain insights into the insurance business, and manage complex relationships between agents and clients.

Challenges in the Insurance Industry

Clients may find the best insurance company, but fraud and policy risks remain significant concerns. Evolving business environments add competition and risk, with issues like theft and fraud plaguing the industry.

Leveraging Data Analytics

Insurance companies use data analytics to gain insights into pricing mechanisms, customer behavior, fraud detection, and risk analysis. By collating precise information on transactions, product performance, and customer satisfaction, insurers can refine their operations.

Transformation through Data Analytics

The digital transformation of insurance companies has brought speed, efficiency, and accuracy to every facet of their operations. Advanced data and predictive analytics have empowered the industry to make data-driven decisions, creating new opportunities and processes.

Use Cases of Data Analytics in the Insurance Industry

1. Insurance Pricing: Sophisticated pricing models help insurers avoid underpricing and generate cost-appropriate premiums.

2. Claim Payment Automation Modeling: Automation leads to faster, more efficient claim processing and increased customer satisfaction.

3. Claim Development Modeling: Accurate prediction of final claim costs ensures financial stability.

4. Life Insurance for Impaired Life Customers: Data-driven assessments reduce the need for expensive medical evaluations, attracting more customers.

5. Fraudulent Claim Modeling: Predictive modeling identifies and prioritizes likely fraudulent activities, optimizing investigative resources and customer satisfaction.

The Value of Data Analytics Data analytics empowers insurers to optimize their operations, assess customer risks, and detect fraudulent activities. Clients can make informed decisions about insurance providers, ultimately increasing the industry’s efficiency and accuracy.

The adoption of big data analytics is reshaping the insurance industry. Investments in data analytics have proven to enhance efficiency, reduce costs, and boost fraud detection rates. Both insurance companies and customers reap the benefits of these data-driven solutions, allowing for more precise targeting and improved services.

CoverGo helps insurers tie together all their processes and collect data in one ecosystem, allowing admins to analyze datapoints across a wide spectrum of processes and teams.

Book a demo today and see how CoverGo can help your business with proper insurance data analytics.

FAQs

• How Low/No-Code Platforms are Democratizing AI for Insurers
• All of the ways AI is Transforming the Insurance M&A Industry.
• 10 Crucial Mistakes to Avoid When Filing an Insurance Claim
• 5 Important Tips That Will Make Filing Claims For Specialized Policies a Breeze
• Artificial Intelligence as The New Defender Against Insurance Fraud

In a world where our lives are increasingly intertwined with technology, it’s no surprise that the insurance industry, traditionally rooted in paperwork and physical documents, is undergoing a profound transformation into the digital age.

Digital insurance, also known as insurtech, is reshaping the way we protect ourselves and our assets. In this article, we’ll explore what digital insurance is and why this shift is essential for insurers to stay relevant in an evolving landscape.

The Traditional Industry Struggle

The insurance industry, often characterized by lengthy paperwork, phone calls, and face-to-face interactions, has long been seen as averse to digital transformation. Historically, the industry’s reliance on legacy systems and manual processes has hindered its ability to keep up with the rapid pace of technological advancement.

But as customers increasingly lead digital lives, insurers are recognizing the need to evolve or risk becoming obsolete.

Customers in the Digital Age

Customers today are more digitally connected than ever before. From shopping online to managing their finances through mobile apps, individuals have grown accustomed to the convenience and efficiency of digital services.

This shift in consumer behavior has raised the bar for insurance companies to meet customers where they prefer – in the digital realm.

Customers have undergone a profound digital transformation, with the ubiquity of smartphones, e-commerce, and a preference for online interactions. The rise of digital natives and millennials, who expect seamless mobile app experiences, alongside the broader cultural shift towards instant gratification and data-driven decision-making, has propelled the demand for digital-first interactions with insurance providers.

This demand is fueled by the desire for convenience, quick responses, personalized services, and the expectation that insurers will adapt to the same user-friendly digital standards set by other industries.

Moreover, the influence of social media, cybersecurity concerns, and the impact of remote work has further cemented the need for insurers to embrace digital channels, from policy issuance to claims processing, to meet customers where they now prefer: in the digital realm.

The Digital Transformation of Insurance

So, how is the insurance industry going digital?

Let’s explore some of the key ways in which insurance has embraced technology to better serve its customers.

Online Policy Management

Policy management is in the middle of transitioning into the digital realm, becoming the preferred touchpoint for insurance customers.

With the convenience of online platforms and mobile apps, policyholders now have the power to purchase, renew, and make adjustments to their insurance policies at their fingertips.

This shift represents a significant departure from the traditional, paper-heavy processes, as customers increasingly value the ability to access and control their insurance information with ease and efficiency.

As a result, insurance companies that prioritize robust online policy management systems not only enhance customer satisfaction but also position themselves as industry leaders attuned to the evolving needs of their digitally-savvy clientele.

Telematics and Usage-Based Insurance

The advent of telematics devices and smartphone apps has allowed insurers to gather real-time data on policyholders’ driving habits.

This data helps insurers offer personalized, usage-based insurance policies at competitive rates.

Telematics and Usage-Based Insurance (UBI) have revolutionized the digital experience for insurance customers by offering personalized, data-driven coverage.

Through telematics devices and smartphone apps, insurers can monitor real-time driving behavior, enabling policyholders to secure customized insurance plans tailored to their specific habits and risk profiles.

This not only fosters a sense of control and transparency for customers but also incentivizes safer driving practices with the potential for reduced premiums.

The integration of telematics and UBI not only aligns with the digital-first preferences of modern customers but also underscores the industry’s shift towards harnessing technology to create more relevant, individualized, and cost-effective insurance solutions.

AI-Powered Underwriting

AI is playing a pivotal role in insurance underwriting, streamlining the process, and benefiting customers in several ways. Through machine learning algorithms and data analysis, AI can rapidly assess risk factors, allowing insurers to offer more accurate pricing and coverage decisions.

This not only expedites policy approvals but also ensures that customers receive insurance plans tailored to their unique circumstances. Furthermore, AI-driven underwriting enhances fairness and objectivity in risk assessment by removing potential human biases, promoting a more equitable pricing structure.

Ultimately, this translates into greater transparency, better pricing, and a smoother customer experience, all of which align with the growing digital expectations of insurance customers.

AI is not ubiquitous among insurers though, but it is quickly becoming a hot topic among insurers who intend on embarking on a digital transformation journey.

Chatbots and Virtual Assistants

Chatbots and virtual assistants are poised to transform the insurance customer experience by providing instant, 24/7 support and information access.

These AI-powered tools can efficiently handle routine inquiries, assist in policy management, and guide customers through the claims process with speed and accuracy.

By offering immediate responses and assistance, chatbots and virtual assistants enhance customer convenience, reduce waiting times, and ensure that policyholders have access to crucial information whenever they need it

Moreover, their availability around the clock aligns with the digital-first preferences of today’s customers, enhancing overall satisfaction and engagement with insurance providers.

Digital Claims Processing

Digital claims processing represents a significant departure from traditional claims processing methods, promising numerous improvements that directly benefit insurance customers.

In the traditional model, claims often involve extensive paperwork, phone calls, and manual documentation, leading to time-consuming and sometimes frustrating experiences for policyholders.

In contrast, digital claims processing leverages technology to streamline the entire process. Customers can now submit claims online or through mobile apps, eliminating the need for physical paperwork and reducing the time it takes to initiate the claims process

Moreover, AI and automation tools are increasingly being used to assess and validate claims quickly and accurately, expediting the overall settlement process

This efficiency translates to faster claims resolutions, reduced administrative burdens, and ultimately, greater customer satisfaction.

Additionally, real-time updates and digital communication channels keep policyholders informed at every step, enhancing transparency and trust in the insurance provider.

In summary, digital claims processing not only simplifies the claims experience but also reflects the industry’s commitment to meeting the evolving digital expectations of its customers.

A watershed moment

the evolution of digital insurance marks a watershed moment for both the insurance industry and its customers. As insurance providers increasingly embrace technology and adapt to the digital-first preferences of their clientele, the benefits are becoming abundantly clear.

Customers now enjoy the convenience of managing policies, accessing personalized coverage, and even filing claims with unprecedented ease.

The shift towards digital insurance not only streamlines processes but also enhances transparency, personalization, and efficiency.

Insurers that invest in these digital transformations are not only positioning themselves as leaders in an evolving landscape but also prioritizing the evolving needs and expectations of their tech-savvy customer base.

The future of insurance is undoubtedly digital, promising a more accessible, responsive, and customer-centric industry for all.

CoverGo helps insurers transform their digital landscape and catch up with our no-code core insurance platform, contact us for a demo: hello@covergo.com 

Key takeaways:

• Efficiency Boost: No-code software reduces reliance on developers, saving time and money by enabling non-technical users to create solutions independently.
• Cost Savings: By requiring fewer developers and reducing training costs, organizations can allocate resources more efficiently and address technical challenges effectively.
• Enhanced Collaboration: No-code tools foster collaboration among stakeholders, leading to diverse perspectives and improved product quality and usability.
• Speed to Market: In the insurance industry, no-code software accelerates product innovation, automates processes, and facilitates collaboration across the value chain.

In this article, we’ll explain what no-code software is and how its benefits are taking the insurance industry by storm.

What is no-code software?

In simple terms, no-code software doesn’t require coding for its development. Users can construct applications through simple drag-and-drop functionality, even when not armed with technical knowledge on programming and software. In other words, the tool is specifically targeted toward non-professional developers – while code sits beneath the platform and ensures its proper running, knowledge of coding is not essential for utilizing it. 

This reduces organizational reliance on programmers, as any business user has the ability to make use of this drag-and-drop functionality, saving money and increasing efficiency and coordination across cross-functional teams. With the rapid digitization of the world economy, the benefits of no-code software tools are applicable to a vast number of industries today. 

In the case of insurance companies, no-code tools can be very effective in enabling businesses to accelerate product innovation in a cost-effective manner. Therefore, leaders will be able to meet rapidly evolving customer demands and increase the satisfaction of their customers and ecosystem partners.

The key benefits of no-code software

The most valuable benefit of no-code technology is the reduction in the time needed to complete a task. Time is everything in business, and saving hours on business-critical tasks that are most amenable to no-code tools means more time to allocate to large improvement projects and other important initiatives that will take your organization to the next level. 

No-code drag-and-drop functionality drastically cuts down the time needed for tasks, given that it becomes unnecessary to rely on a developer and the limitations of their schedule. Instead of competing for their precious time and resources, non-technical business users are able to leverage no-code tools to come up with new solutions directly out of the box.

A simple yet increasingly powerful example of this can be found in the face a corporation displays to the world: its website. In years gone by, excessive front-end development was needed to create beautiful websites that users would want to linger on. 

However, with the arrival of user-friendly, no-code website builders such as Wix, the reliance on front-end developers in web design has disappeared. Using Wix, you are able to use drag-and-drop tooling to build websites in a fraction of the time, and better still, any integrations that may be needed (such as a payments processor in order to sell products directly on your site) are included too, supercharging go-to-market.

Reducing reliance on developers brings with it another major advantage in the form of cost savings. Developers tend to command higher salaries than equally tenured non-technical workers and are costly for companies to train and retain in increasingly competitive markets for technical talent. 

Through the use of no-code software, fewer developers are required; instead, they can be more selectively deployed to the most cutting-edge technical problems companies are attempting to solve. Problems for which no-code does not yet have the answer. 

This entails greater efficiency. As no-code allows a company to lean on non-technical business users, applications and products are built through the help of more people. This significantly reduces workflow bottlenecks, given that a small group of people are no longer the only resources with the expertise to contribute. 

The resulting flexibility in resource allocation means that each project can be completed more efficiently, allowing the next initiative to reach the agenda that much faster. It also reduces the likelihood of employee burnout, as the workload is spread over evenly across the organization.

Before no-code software became popular, anything code related tended to be built in silos, since the technical knowledge base required to complete these projects was incredibly large. As explained above, because tools have become easier to use through no-code technology, more people are now involved in building digital products. 

This ensures a diversity of perspectives spanning all stakeholders in the organization, which tends to increase the quality of the end product, as well as usability by the end user, given they are also less likely to be so technically inclined.

How no-code software can be leveraged in the insurance industry

Let’s take a deep dive into how no-code tools can be used to improve and simplify existing workflows and processes in insurance.

Increased speed to market

Modern insurance needs are only becoming more complex as the world continues to innovate and digitize. With an abundance of sensitive information stored in the cloud, cyber risk has increased exponentially in recent years, and cyber insurance products must keep pace in order to adequately safeguard against malicious actors. 

Even among standard personal insurance lines, such as investment-linked or annuity life insurance policies, customer needs are rapidly increasing and evolving, and product innovation must keep pace. However, the rate of product launches expected by the market has become incredibly high, and legacy core systems simply cannot keep up, where product lifecycles last months.

With no-code insurance technology, it’s now possible to design products in days, thanks to drag-and-drop functionality built upon key insurance policy building blocks such as plan, type, benefit, and deductible objects to name a few. Using APIs, products can be seamlessly connected to multiple channels of distribution, supercharging go-to-market. 

This empowers insurers, brokers and MGAs to meet customer needs quicker and more completely, increasing customer satisfaction. Early adopters of no-code software in insurance are winning these product battles across geographies, industries, and lines of business, providing them with a powerful competitive advantage.

Automation for MGAs

With no-code software, building a system with thousands of brokers and/or suppliers is achievable, where each is customized with its own set of workflow rules. This reduces a significant amount of time and cost for MGAs, thanks to the ability to automate larger parts of their processes as a result. The need to understand and design suitable processes each time an MGA is working with a new broker is eliminated, increasing the efficiency of operations dramatically and allowing an MGA to partner with more brokers and suppliers, increasing revenue.

Collaboration across the value chain

The ability to build complex insurance products in a matter of days makes collaboration between different stakeholders in the industry easier than ever. Given the lack of excessive coordination required between employees on each side as a result of the user-friendly product development experience when utilizing no-code technology, MGAs, carriers, and brokers can easily work together on meeting the needs of the end customer.

As a result of regular collaboration, processes on all sides become more efficient, as brokers have a better understanding of the products producers are able to underwrite, as well as their risk appetite and premium pricing. Thus, there are fewer surprises for all parties, especially for the customer as the initial quote received from the broker is more accurate.

Omni-channel digital distribution

No-code insurance platforms not only have the ability to expedite product development but most importantly can connect newly created products to a variety of digital distribution channels. 

Through front-end application builders and API integrations, digital insurance products can be rolled out on insurance companies’ websites as well as on online aggregators and marketplaces, revolutionizing the quote, bind, and issue process flow and enabling straight-through processing for instant policy issuance. 

Brokers and agents receive the complete view of the customer through bespoke front-end portals, enabling seamless cross-sales and renewals. Paper forms are no longer necessary and are easily digitizable across all policy lines, rapidly increasing the speed at which distributors operate.

Seamless policy and claims administration

In the past, policy and claims administration has tended to be an incredibly inefficient process requiring manual intervention by specialized teams of employees and siloed decision-making. With the propensity for paper forms to be filled out incorrectly, it was often a necessity for claims adjusters and renewal teams to track down these customers by email and phone. 

Bottlenecks would constantly arise and persist, making for very inefficient systems of engagement. Legacy core policy administration systems would further slow employees down. 

However, no-code insurance platforms can eliminate these pain points by automating policy and claims administration. Thanks to the digitization of paper forms from the very beginning of the customer journey, management of endorsements, renewals, and claims processing can be consolidated into a single view and integrated with your existing core system to ensure visibility on existing policies. 

Get in touch with us today

CoverGo is the first fully configurable, modular, no-code insurance platform for rapid product launch and go-to-market, omni-channel distribution, and intelligent policy management. Powered by an unrivaled suite of insurance APIs, our platform enables out-of-the-box integration and the ability to automate all of your insurance processes. 

If you’re an insurer seeking the transformational benefits of no-code software, look no further. Get in touch with our expert team today to learn how you can take your insurance business into the future.

FAQs

• How Low/No-Code Platforms are Democratizing AI for Insurers
• All of the ways AI is Transforming the Insurance M&A Industry.
• 10 Crucial Mistakes to Avoid When Filing an Insurance Claim
• 5 Important Tips That Will Make Filing Claims For Specialized Policies a Breeze
• Artificial Intelligence as The New Defender Against Insurance Fraud

According to research conducted by Willis Towers Watson, the third largest insurance broker globally, by leveraging predictive analytics, 67% of insurers have been able to reduce policy issuance and underwriting expenses and 60% of insurers have been able to increase sales and profitability.

With society becoming increasingly digitized and the Internet of Things, or IoT, rapidly expanding, there is a plethora of data sources to choose from today. The rate of software innovation means that analytics tools are only becoming more and more advanced, and are able to ingest these varied data types efficiently.

The big winner is the insurer, who can use these modern predictive analytics tools to make sense of this array of data, ultimately improving their understanding of and ability to predict their insureds’ behavior.

For example, P&C insurers are now collecting data from telematics, interactions with agents, interactions with customers, smart homes and the smart/IoT devices within them, and social media to better understand their customers’ lives and risk factors, improving claims management, underwriting decisions, and product development.

A related tool in insurance is predictive modeling, most often employed in the form of “what-if” modeling, which provides insurers with the ability to simulate various business scenarios. This allows insurers to evaluate the impact of an adverse event on their overall book of business..

COVID-19 has demonstrated to insurers that staying in front of change as much as possible is pivotal, and when employed correctly, “what-if” modeling can be a powerful tool to inform accurate changes in underwriting (ie. rate changes) and product design, and claims processing and management.

In an increasingly data-driven context, predictive analytics is changing the P&C insurance world in 13 impactful ways in 2024.

1. Pricing and assessing risk better

While it’s a well-documented use case of predictive analytics in insurance, pricing and risk selection have seen a marked improvement in 2024 in large part due to the availability of improved data insights. With the increased variety of data sources and higher levels of data fidelity and quality, the information insurance companies are collecting is more actionable, driving better decisions and outcomes.

As mentioned above, the data being collected now – sources like social media, smart devices, and agents’ direct interactions with customers – is more valuable because it is recorded directly from insureds. Data that isn’t being gathered from indirect sources (common examples are criminal records and credit histories) does not require interpretation to understand insureds’ behavior because insurers are receiving it directly (e.g. from social media).

More relevant data sources lead to more accurate insights, which in turn is empowering the engine of predictive analytics to deliver better outcomes in the form of improved pricing and risk selection. The rate of data collection from smart devices by insurers is growing rapidly (reported to be approximately 10 MB of data per household per day).

2. Identifying cancellation risks early

For insurers (and also brokers for that matter), the most important dates in the year are when the majority of policies are up for renewal, the biggest of which is January 1 followed by the first day of the remaining quarters of the year (April 1, July 1, October 1). For large customer accounts, multiple policies will share the same renewal (and expiration) date, so it is crucial for the health of the business that these customers stay with the insurer.

Acquiring new customers is important, but another key to success is keeping a high percentage of your existing customers on board. Assuming costs are steady, that is how you sustainably grow an insurance business.

Thus, insurers worry a lot about negotiating these renewal dates successfully and want to have as much advance warning as possible on the customers that may be looking to move their business elsewhere. That way, there is enough time to convince these clients to renew their policies.

Predictive analytics is playing an integral role in identifying the customers who are most likely to cancel or lower coverage and thus require special attention in order to secure the renewal of coverage. Thanks to more advanced data insights, insurers are having increasing success identifying customers who may be unhappy with their existing coverage and would thus be more likely to switch to a competitor during the upcoming renewal cycle early.

With more time for action thanks to early identification of cancellation risk, insurers are better able to maintain their books of business.

3. Forecasting fraud risk

Insurance companies are in a constant battle against fraud. According to The Coalition of Insurance Fraud, in the United States alone, $80 billion is lost annually from fraudulent claims. For insurers in the United States and Canada, anywhere between 5 and 10% of claims costs are attributable to fraud.

Predictive analytics is a powerful weapon against claims fraud. Insurers can identify and prevent potential fraud before it happens and even have the ability to take corrective action retroactively. Once again, insurers are turning to social media as it is also a great place to look for signs of fraudulent behavior. Even after claims have been settled, insured’s online presence is being monitored for suspicious activity that may be indicative that fraud has been perpetrated.

The use case of predictive modeling for fraud detection is clear. According to SmartDataCollective, “[where] humans fail, big data and predictive modeling can identify mismatches between the insured party, third parties involved in the claim (e.g. repair shops) and even the insured party’s social medical accounts and online activity”.

4. Intelligently prioritizing claims

In a modern society where information is at your fingertips and instant gratification is the order of the day, customers are looking for rapid, yet personalized, service more than ever. The details may change, but no matter the industry, making this a reality is always a challenge.

Nowadays, thanks to cutting-edge predictive analytics, insurers are indeed making good on this task. Predictive analytics is informing insurers on which claims to prioritize and when saving time and money while improving customer satisfaction and retention in the process.

Given the ability to forecast claims data, insurers employing predictive analytics command a strategic advantage through an unrivaled ability to tighten budgets weeks and months ahead.

5. Doubling down on customer loyalty

No matter the industry, no matter the product, brand loyalty is everything. Nowadays, insurers can use predictive analytics to analyze historical patterns of behavior of their loyal customers and anticipate what their future needs might be.

In most markets, for many P&C lines, especially the most standardized products, pricing, and product offerings are extremely competitive across many insurance companies, and brand loyalty becomes a huge trump card.

Insurers are utilizing information revealed by historical customer data to proactively optimize processes and products for the core of their customer base, helping them to strengthen brand loyalty proactively.

6. Placing outlier claims under the microscope

Increasingly, insurance companies are employing predictive analytics to help identify claims that unexpectedly become large losses, otherwise known as outlier claims. With state-of-the-art analytics tools, insurers are analyzing previous claims for similarities, and once identified, automating alerts to claims specialists to ensure special care is taken with these claims.

Predictive analytics tools provide insurers with advanced notice of potential losses and the related complications, helping them to reduce the frequency of outlier claims and the resulting detrimental financial impacts.

7. Reworking claims processing

With predictive analytics, insurers are varied data sets to determine the true course and nature of events, which therefore affects claims outcomes. Using a data-driven method as much as possible has streamlined the process and helped the claims department to reduce risk of human error.

Equally, thanks to the availability of historical data through predictive analytics tools, insurers are analyzing past claims processes and improving their efficiency, as well as continuously iterating documentation on best practices in claims.

8. Ensuring effective data management practices

In the course of conducting business, insurers generate and collect a massive amount of data. For many years, this data was woefully underutilized, both due to ignorance of the possibilities of data-driven insights and insufficiently advanced technology to parse its complexity and harness it effectively.

Thanks to modern technology and greater awareness of the value of data today, neither of these issues is holding back the insurance industry any longer, and predictive analytics is helping insurers make the most of their data, whether it be more accurately predicting customer behavior or reducing inefficiencies in the underwriting process.

However, insurers can only extract insights from their data with excellent data cleaning, preparation, and management. If data is scattered across a siloed architecture, it becomes difficult to properly clean it and systematically organize it in data warehouses.

Without a unified approach to system architecture and data management policy, the fidelity of data is lost, and predictive analytics isn’t possible.

9. Leveraging data modeling

Once effective data management procedures are in place, insurers can start to leverage the capabilities of data modeling for business growth.

Data modeling enables insurers to construct robust knowledge bases on their customers, and in turn quantify customer profitability through the identification of likely cross-sell and upsell opportunities, which are based on the unique characteristics of the customer.

Informed by powerful data models – the result of intelligently putting together data-driven insights made possible by effective data management – insurers are able to deliver tailored solutions to their customers at scale and on-demand in the cloud.

10. Discovering new growth markets

Predictive analytics can help insurers uncover new markets or better target existing markets it serves. Through data analysis, insurers can learn demographics and key patterns of behavior, enabling them to precisely tailor marketing efforts.

In a social media age, where 3.2 billion people use social media globally, the rise of influencer marketing and other types of social media marketing are increasingly important to holistic marketing strategies.

11. Building a deeper understanding of the customer

According to TechTarget, the 360-degree view is “the idea that companies can get a complete view of customers by aggregating data from the various touch points that a customer may use to contact a company to purchase products and receive service and support.” Through predictive analytics, insurers are able to pull together data and insights from multiple sources to inform a complete understanding of their customers.

Prior to the rise of predictive analytics, insurers could only extrapolate the profile of the average customer from a basic set of information (e.g. demographics), which resulted in largely misunderstood customers and suboptimal revenues. Today, the opposite is true thanks to the use of predictive analytics tools in insurance.

12. Providing a personalized user experience

Whether shopping for a suit or insurance, customers are seeking a tailored experience curated especially for them. Insurers are using the actionable insights generated by predictive analytics to come up with a far better understanding of their customers, and how best to serve them in an online world.

Philosophies like the 360-degree view help to precisely detail the profile of customers, allowing insurers to then customize the end-to-end user experience from products and pricing to policy servicing and claims settlement.

Such personalization ultimately makes it far more likely that the customer buys insurance from them, and by serving customers so well, referral business also increases dramatically, lightening the load on marketing efforts and reducing campaign spend.

13. Hyper-customizing the product

At the core of a personalized user experience are products truly customized to each individual customer in the small details. In the past, this simply wasn’t feasible at scale with the legacy technology utilized by insurers, but with ever increasing amounts of IoT data available and recent leaps in machine learning and artificial intelligence, true product customization is now possible.

Leveraging the latest advances in machine learning technology, insurers are utilizing predictive analytics on customer behavior, buying preferences and pricing sensitivity to offer the most relevant insurance products to their customers at scale.

14. Cutting costs

Put simply, predictive analytics is a tool empowering insurers to make better decisions. These decisions lead to actions that are ultimately driving better outcomes, and over time, those original insights no longer retain their novelty – because they have already been filtered down into existing processes.

Of course, then the next batch of insights is delivered through predictive analytics, and once the next set of winning actions emerges, the cycle repeats itself. Previous insights become the backbone of current processes.

Not just any processes – better, more efficient processes. Ones that reduce costs, and increase the bottom line. It’s that simple. That’s the power of predictive analytics.

15. Reaching customers where they are

Predictive analytics is a powerful tool that enables insurers to effectively utilize digital distribution channels and connect with customers on platforms they frequently use. By leveraging advanced data analysis techniques, insurers can gain valuable insights into customer behavior, preferences, and needs. This information allows insurers to segment their customer base and tailor their digital distribution strategies accordingly.

Predictive analytics helps insurers identify the most suitable digital channels for reaching their target audience, ensuring that resources are allocated effectively. Furthermore, by analyzing historical data and patterns, insurers can create personalized marketing campaigns and offers, increasing the likelihood of converting leads into customers.

Predictive analytics also assists insurers in accurately assessing risk and determining appropriate pricing strategies. By analyzing vast amounts of data, insurers can create predictive models that evaluate potential risks associated with customers. This enables insurers to communicate precise pricing information through digital channels.

Moreover, predictive analytics helps insurers identify early warning signs of customer churn and implement proactive retention strategies. By analyzing customer interactions and behavioral patterns, insurers can identify customers at risk of leaving and intervene with personalized retention efforts delivered through digital channels.

Finally, through continuous analysis of key performance indicators, insurers can gather feedback on the effectiveness of their digital distribution efforts and make necessary adjustments to optimize their strategies. In summary, predictive analytics empowers insurers to leverage digital distribution channels effectively, connect with customers on their preferred platforms, enhance personalization, optimize channel selection, and improve customer acquisition and retention efforts in the digital realm.

Looking Ahead

In the future, predictive analytics will become increasingly prevalent thanks to its ability to deliver actionable insights for insurers across the entire value chain. Investing in talent possessing the technical knowledge to maximize its potential will be a cornerstone of recruiting strategy in the coming years, given the potential for insurers to build a lasting competitive advantage in human capital.

Predictive analytics is most effective when layered upon a modern technology platform. CoverGo is the first no-code insurance platform for rapid product development, omni-channel distribution, and streamlined policy and claims management, helping you build a truly robust insurance ecosystem.

Best of all, CoverGo can be integrated with any predictive analytics tool on the market thanks to a suite of more than 500 APIs. Contact us today to arm yourself with the ability to utilize predictive analytics to its fullest capabilities.

Insurance management software refers to a type of computer program or platform designed to help insurance companies manage their policies, claims, and other related operations. The software can be used to streamline various processes involved in insurance, such as underwriting, policy management, claims processing, customer support, billing, and reporting.

Insurance management software can be customized to meet the specific needs of different types of insurance companies, including health insurance, life insurance, property and casualty insurance, and more. Some common features of insurance management software may include:

Product Builders

Insurance management software can provide product builders that make insurance product building faster and more scalable. Product builders are tools within the software that allows insurance companies to easily create and modify insurance products without requiring extensive programming or technical knowledge.

With product builders, insurance companies can quickly create new policies and make changes to existing policies, such as adjusting coverage levels or adding new features. This can help insurance companies stay competitive and respond quickly to changing market demands. In addition, product builders can also help insurance companies reduce costs and streamline their operations by automating the product-building process.

Insurance management software can provide a variety of product builders to meet the needs of different types of insurance products. For example, a health insurance product builder may allow insurance companies to select different coverage levels for different medical procedures, while a property and casualty insurance product builder may allow insurance companies to customize coverage options based on the type of property being insured.

By providing product builders, insurance management software can help insurance companies stay ahead of the competition, improve customer satisfaction, and increase revenue. With the ability to quickly and easily build new insurance products, insurance companies can offer more diverse and customized insurance options to their customers, which can lead to increased sales and customer loyalty. Additionally, the scalability of product builders can help insurance companies expand their offerings and enter new markets more efficiently, further increasing their revenue potential.

Policy administration

Insurance management software can provide modern policy administration systems that can help insurance companies streamline their policy management processes, improve operational efficiency, and provide better customer service.

Modern policy administration systems within insurance management software are designed to replace legacy systems, which can be slow, outdated, and difficult to maintain. These modern systems are built using the latest technology and can provide insurance companies with a range of benefits.

One of the main benefits of modern policy administration systems is their flexibility. They can be easily customized to meet the specific needs of different types of insurance products, including health insurance, life insurance, property and casualty insurance, and more. This means that insurance companies can tailor their policy administration systems to their exact requirements, which can help them provide more efficient and effective service to their customers.

Another benefit of modern policy administration systems is their automation capabilities. They can automate many manual processes involved in policy administration, such as data entry, underwriting, and claims processing. This can help insurance companies reduce costs, improve accuracy, and free up staff time to focus on more complex tasks that require human intervention.

Furthermore, modern policy administration systems can also provide real-time data and analytics, which can help insurance companies make informed decisions about their policies and operations. This data can be used to identify trends, spot potential risks, and improve policyholder satisfaction by identifying areas where processes can be streamlined or improved.

Claims management

One way that insurance management software can help with claims management processing is by providing digital claims submission tools. These tools allow policyholders to submit claims online, either through a web portal or a mobile app, without having to visit an office or mail in paper forms. This can save time and reduce the likelihood of errors, as the system can automatically validate and verify claim information.

Another way that insurance management software can help with claims management processing is by providing automated claims processing. With the help of artificial intelligence and machine learning, insurance management software can analyze and process claims quickly, flag potential fraud, and verify claims eligibility.

Insurance management software can provide real-time updates on the status of claims, including notifications of when a claim has been received, when it is being reviewed, and when a payout has been made. This can provide policyholders with transparency and peace of mind throughout the claims process.

Billing and payment

Insurance management software can help with billing and payment by providing online billing and payment portals. These portals allow policyholders to view their bills and make payments online, either through a web portal or a mobile app, without having to visit an office or mail in paper checks. This can save time and reduce the likelihood of errors, as the system can automatically verify payment information and ensure that payments are applied correctly.

Another way that insurance management software can help with billing and payment is by providing automated billing and payment processing. With the help of automation tools, insurance management software can generate bills, process payments, and update account information automatically, reducing the need for manual data entry and reducing the likelihood of errors.

In addition, insurance management software can provide real-time updates on billing and payment activity, including notifications of when a bill has been generated, when a payment has been received, and when a payment is due. This can give policyholders transparency and help them manage their finances more effectively.

Digital Distribution

Insurance management software can help insurers with omni-channel digital distribution by providing tools and features that allow them to distribute their insurance products through multiple channels, such as online portals, mobile apps, and social media platforms.

For example, insurance management software can provide a web portal where customers can view and purchase insurance products online. The portal can be customized to include features such as product comparison tools, personalized recommendations, and online chat support, which can help customers make informed decisions about their insurance needs.

Similarly, insurance management software can provide a mobile app that allows customers to purchase and manage their insurance policies on their mobile devices. The app can include features such as push notifications for policy renewals, digital ID card storage, and easy access to claims submission tools.

In addition, insurance management software can enable insurers to distribute their products through social media platforms, such as Facebook and Twitter. This can be done by integrating the insurance products with social media advertising and marketing campaigns, allowing insurers to target specific customer segments and drive sales through social media.

Embedded Insurance

Insurance management software can help insurers spread their products to digital channels using embedded insurance. Embedded insurance refers to the integration of insurance products into the products or services of other businesses, such as e-commerce platforms, ride-sharing apps, and home security systems. This allows insurers to reach new customers through existing distribution channels, without the need to create their own distribution channels.

Insurance management software can help insurers to develop and manage embedded insurance products by providing the necessary tools and features to integrate insurance products with third-party products and services. For example, insurance management software can provide APIs (application programming interfaces) that allow insurers to integrate their insurance products with the products or services of other businesses.

One example of embedded insurance is ride-sharing insurance, which is offered by insurance companies to drivers who use ride-sharing apps such as Uber and Lyft. With the help of insurance management software, insurers can integrate their ride-sharing insurance products with the ride-sharing apps, allowing drivers to purchase and manage their insurance policies directly through the app.

Another example of embedded insurance is travel insurance, which is often offered by airlines and travel booking websites. With the help of insurance management software, insurers can integrate their travel insurance products with these websites, allowing customers to purchase travel insurance as part of their flight or travel booking.

APIs

Insurance management software can help with APIs and integrations with third-party software and services, as well as its ability to integrate with legacy systems that already exist inside insurers.

APIs, or application programming interfaces, allow different software systems to communicate with each other, enabling the exchange of data and functionality. Insurance management software can provide APIs that allow insurers to integrate their insurance products with third-party software and services, such as e-commerce platforms, mobile apps, and social media platforms. This allows insurers to expand their distribution channels and reach new customers through existing digital channels.

In addition, insurance management software can also help with integrations with legacy systems that already exist inside insurers. Many insurers have older, legacy systems that were built using older technology and are difficult to integrate with newer systems. Insurance management software can provide integration tools that allow legacy systems to communicate with newer systems, enabling insurers to streamline their processes and improve operational efficiency.

For example, an insurance company may have a legacy claims processing system that is not integrated with its newer policy administration system. Insurance management software can provide integration tools that allow the two systems to communicate with each other, enabling the claims processing system to access policy data and update policy information in real-time.

Is it time to change or upgrade your insurance management software?

In today’s ever-digitalizing world, it is crucial for insurers to upgrade their internal systems and adopt insurance management software. Doing so enables insurers to keep pace with evolving customer expectations, streamline their operations, and expand their distribution channels to reach new customers.

Insurance management software offers a wide range of tools and features that can help insurers improve their product development, policy administration, claims management, billing and payment, analytics, and distribution capabilities. It can also integrate with legacy systems, providing a seamless transition to modern systems.

By adopting insurance management software, insurers can increase their operational efficiency, reduce costs, and offer better customer service. They can also leverage advanced analytics to gain insights into customer behavior and market trends and use that data to develop more personalized insurance products and services.

Are you ready to adopt insurance management software for your insurance transformation needs? Talk to one of our experts today and learn how CoverGo helps insurers save money, act faster, and grow larger.

Insurtech refers to various technology-enabled innovations that allow insurance firms to deliver superior and streamlined customer experience. In the current age, it is impossible to imagine the future of the sector without insurtech.

Touted as a key driver of growth and innovation, insurtech is set to reshape how the insurance sector operates. The projected CAGR (Compound Annual Growth Rate) of the global insurtech market is predicted to be a whopping 48% between 2021 and 2028.

So is this the right time for your insurance firm to integrate with an insurtech platform?

The answer is a resounding YES — read through the paragraphs below to discover why we say that.

How will insurtech impact the insurance sector?

The most significant impact of integrating with an insurtech platform will be on the reduced churn and uptick in gross premiums. Using insurtech, insurers can offer innovative products to their customers and market them in a lesser amount of time compared to the traditional route. Moreover, digital integration will result in a better front-end user experience and cut down on the need of employing middlemen.

Another key area where insurtech integration can make a real difference is an increase in the productivity of the operations team. Insurers spend a significant amount of time managing workflows across various departments within the firm, which can lead to unnecessary bottlenecks. But embracing a digital solution means better workflow mechanisms that can contribute towards better performance of the entire organization.

Reduction in costs is also a major pull for insurers to consider digital integration as legacy systems often pose serious challenges to efficient project management. By leveraging the power of technology, companies can not only increase their overall efficiency but also position themselves as worthy a competitor in the market.

Let’s take a look at specific use cases of insurtech platforms benefiting insurance firms:

Embedded insurance

Embedded insurance is one of the easiest ways to offer personalized insurance products to customers, based on their needs. An embedded product is usually purchased during a commercial transaction involving another product or service. For example, purchasing auto insurance during a car purchase is an example of embedded insurance.

There are various strategies that insurers use when embedding their offering along with another product. These include:

• Bundled: where the insurance product becomes a value-add to the product/service the customer is purchasing. For example, complimentary travel insurance when you purchase flight tickets.
• Linked: where the insurance product is offered as an add-on to the underlying product or service during the sale. For example, if you purchase a mobile phone and a retailer gives you the option to insure your mobile device at the time of checkout.
• Related: here the insurance product doesn’t become part of the transaction though it may be offered during the life cycle of the transaction. For instance, when you are prompted to add on a medical insurance plan at the time of booking a health check-up.

Insurtech can gather useful insights to help insurers decide which strategy would be more appropriate based on their offering and target audience. Insurers can also use the data for identifying cross-selling opportunities and opening up new revenue streams.

Digital distribution

Even though there have been changes in the insurance sector over the past couple of years, very little has changed when you think about insurance distribution. Agents and brokers continue to play a crucial role though customers may opt to purchase the policy directly from the insurer’s website or through an aggregator.

Opting for digital integration offers access to several insurtech products that link several independent agents with multiple insurers to sell insurance products more efficiently and in a cost-effective manner.

Product building 

Product innovation is critical to surviving in a hyper-competitive market such as the insurance sector.

Not only does insurtech simplify the entire process of getting, managing, and understanding insurance for the end consumer, but it also encourages firms to price their products more competitively and address the needs of their customers. As a model, insurtech propels firms to offer more value to the end customer, as customer satisfaction ranks above everything else, including increasing operational efficiency.

In some cases, digitization also nudges the business to completely overhaul the current business model to improve the overall customer experience.

Take, for example, how Covergo’s product builder supports the creation, configuration, and management of your insurance products at a lightning speed without writing a single line of code. Even if you have no tech background, you can still benefit from the product builder platform and develop products, no matter how simple or complex.

Are there any potential challenges of insurtech transformation?

There are a few bottlenecks for insurtech integration to happen effectively. Here are a few critical ones to consider:

Limited option of integration for firms with legacy platforms

In the case of insurers who have legacy IT platforms that are almost close to their expiry, the option of integrating with insurtech is limited.

Even for those who consider “refactoring,” which involves an alternation of the internal structure of an existing IT system without changing the core functionality, the results are not completely fruitful. Though it allows insurers to upgrade their technology, the costs can be much higher than anticipated which completely negates the purpose as insurtech is aimed at bringing the costs down.

And this is where partnering up with the right insurtech platform can make a real difference. Over time, APIs have emerged as the go-to solution for insurance firms who want to digitize their business, thanks to the multiple product configurations that APIs offer.

CoverGo offers 1000+ insurance APIs that can seamlessly integrate with process, legacy, or third-party systems. Our APIs are agnostic to the use case which makes them the perfect companion for your business, regardless of your size or scale of operation.

Insurtech processes are not easy to adapt to

Firms with legacy systems may find it slightly challenging to adapt to an insurtech platform as the existing systems aren’t designed for integration.

This may prompt some insurers to opt for building the system architecture from scratch to fit their unique requirements and aid a seamless integration. However, there are several disadvantages of this approach such as higher costs, longer timelines, and greater risk, compared to what a readymade insurtech platform offers.

Additionally, this approach may result in solutions that are not sufficiently innovative to sustain in the long run.

Delays in the approval process

Several insurance firms have long-drawn internal approval processes that slow down the integration.

When there are several stakeholders involved, who have conflicting opinions on the issue, it can take much longer to reach a consensus. In fact, several insurers have a perception that insurtech platforms lack adequate knowledge about legacy systems, making it difficult for them to suggest the right solution.

This can also increase the cost and time of implementing the new technology.

Challenging legal requirements

Given that the insurance sector itself is heavily regulated, integration with an insurtech platform is also rife with several legal issues.

The top concern is about data protection as insurtech involves a large amount of data collection. Similarly, while smart contracts that form the bedrock of insurtech accelerate the resolution of claims and promote quicker settlements, a lot depends on the type of legal framework available in the country where the insurance firm operates. Jurisdictions, where blockchain and smart contracts are not recognized by the legal system, may pose challenges for the insurance firm adapting to insurtech.

How to choose the right path?

Weighing pros and cons is a crucial exercise for any business that wants to try out something new. The case of the insurance sector is no different.

But the challenges posed by insurtech integration can be easily ironed out by parenting up with the right platform. Given that the benefits can help you to stay ahead in the game, it’s time to get in touch with CoverGo to schedule a demo right away. 

You can take full advantage of the seamless insurtech integration CoverGo offers to achieve your goals without overshooting the costs.

The insurance industry has been around for centuries and has been built on principles that have stood the test of time. However, in today’s fast-paced world, the industry needs to adapt to changing customer needs and technological advancements. Unfortunately, the industry has been slow to embrace change, and old-school thinking is holding it back. In this blog, we will explore how old-school thinking is limiting the insurance industry’s potential.

Resistance to change

The insurance industry has always been a conservative industry, with a risk-averse culture. This culture has made it challenging for the industry to embrace new technologies and changes in customer preferences. Insurance is an industry that has traditionally relied on face-to-face interactions with customers and paper-based processes. However, the rise of digital technologies has disrupted this model, presenting both opportunities and challenges for insurers. While some insurers have embraced digital transformation, others have been slower to adapt, often resisting digital change.

One reason why insurers may resist digital change is due to their legacy IT systems. Many insurers have invested heavily in IT infrastructure over the years, and their systems may be outdated and difficult to upgrade or integrate with new technologies. Upgrading these systems can be costly and time-consuming, which can be a barrier to adopting new digital tools.

Data privacy and security concerns are also major considerations for insurers. Insurance companies deal with a lot of sensitive customer information, such as personal and medical data. Adopting new digital tools and platforms may raise concerns about data privacy and security, and insurers may be hesitant to take risks in this area.

Another reason why insurers may resist digital change is due to their traditional business models. Many insurers have long-standing relationships with customers that are built on face-to-face interactions, and they may be hesitant to switch to a more automated, digital approach. This is especially true for insurance products that require a high degree of personalization, such as life insurance.

Furthermore, there may be a lack of understanding or awareness of the potential benefits of digital transformation. Insurers may not fully appreciate the ways in which digital tools can improve efficiency, reduce costs, and enhance the customer experience. This lack of understanding can make it difficult to build a business case for digital change.

Finally, insurers may face regulatory or compliance issues when implementing digital changes. Insurance is a highly regulated industry, and insurers must comply with strict guidelines and regulations. Implementing digital changes may require additional regulatory approval, which can add to the complexity and cost of the process.

Despite these challenges, many insurers are gradually embracing digital change and adopting new technologies to stay competitive in the industry. Insurers that are successful in their digital transformation efforts are those that are able to strike a balance between maintaining their existing business models and embracing new digital tools and platforms. By doing so, they can leverage the benefits of digital transformation while continuing to serve their customers in the way that they prefer.

There are options out there, however. platforms like CoverGo help make the move to digital transformation a straightforward process and offer new options for insurers to expand their business.

Overreliance on traditional distribution channels

Insurance companies have traditionally relied on traditional distribution channels, such as agents and brokers, to sell their products to customers. However, this model has come under increasing scrutiny as digital technologies have disrupted the industry. Many insurers are now recognizing that they are over-reliant on these traditional distribution channels and are exploring new ways to reach customers.

One reason why insurers have been over-reliant on traditional distribution channels is that they have long-standing relationships with agents and brokers. Many insurance companies have established partnerships with these intermediaries, and they have become an important part of the distribution model. However, this model can be expensive, as agents and brokers require commissions and fees. Additionally, it can limit the reach of insurance products, as agents and brokers may only sell products in certain regions or to certain customer segments.

Another reason why insurers have been slow to adopt new distribution channels is that they may not fully understand the potential benefits of digital technologies. Digital channels, such as online marketplaces, social media platforms, and mobile apps, can provide insurers with new ways to reach customers and offer personalized products and services. These channels can also reduce costs and increase efficiency, as they require less human intervention.

Insurers that are successful in adopting new distribution channels are those that are able to strike a balance between maintaining their existing partnerships with agents and brokers and leveraging new digital channels. This requires a shift in mindset, as insurers need to view digital technologies as an opportunity rather than a threat. It also requires a willingness to invest in new technologies and platforms, as well as a commitment to innovation and experimentation.

Lack of personalization

Insurance is a highly competitive industry, and one of the key factors that can set insurers apart is their ability to personalize their service to customers. However, many traditional insurers do not often personalize their service to customers, instead relying on standardized products and services that are designed to meet the needs of a broad range of customers.

One reason why traditional insurers may not personalize their service to customers is that they have traditionally relied on a one-size-fits-all approach to product development. This approach is often driven by a desire to reduce costs and increase efficiency, as it allows insurers to develop standardized products that can be sold to a large number of customers. However, this approach can also limit the ability of insurers to tailor their products and services to the unique needs and preferences of individual customers.

Another reason why traditional insurers may not personalize their service to customers is that they may lack the data and analytics capabilities needed to do so. Personalization requires a deep understanding of customer behavior, preferences, and needs, and this requires access to large amounts of data and sophisticated analytics tools. Many traditional insurers may not have invested in these capabilities, making it difficult for them to personalize their service to customers.

Finally, traditional insurers may not prioritize personalization because they do not see it as a key differentiator in the industry. In a highly competitive market, insurers may focus more on price, product features, and customer service, rather than on personalization. However, as customers become more accustomed to personalized service in other industries, such as retail and hospitality, insurers may need to start prioritizing personalization if they want to stay competitive.

Complex products and services

Insurance products have traditionally been complex, with lengthy policy documents, complex language, and complicated pricing structures. This has made it challenging for consumers to understand what they are buying and has led to a lack of trust in the industry. Insurers need to simplify their products and services to make them more accessible to customers.

Many insurers have developed complex systems to manage their products and services, and these systems are often deeply embedded in their operations. As a result, insurers may be hesitant to change their processes and tools, as doing so could disrupt their entire business.

One reason why insurers have complex products is that insurance products are highly regulated. Insurers are required to comply with a range of regulations and guidelines, which can make it difficult to simplify their products and processes. Additionally, insurers may need to work with multiple partners, such as reinsurers and underwriters, to develop and manage their products, which can add to the complexity of the process.

Another reason why insurers may be hesitant to change their processes and tools is that they have invested heavily in their existing systems. Insurers may have developed custom-built systems or purchased off-the-shelf software that has been tailored to their specific needs. These systems may be highly customized and integrated with other systems, making it difficult to switch to new tools or processes without significant investment and disruption.

However, the complexity of insurance products and systems may also be a barrier to innovation and change. Insurers that are unable to adapt to changing customer needs and market conditions risk losing market share to more agile competitors. To stay competitive, insurers may need to prioritize innovation and invest in new tools and processes that can help them better understand customer needs and preferences.

Conclusion

The insurance industry needs to adapt to changing customer needs and embrace new technologies to remain relevant in today’s fast-paced world. The industry needs to move away from old-school thinking and embrace a culture of innovation, flexibility, and customer-centricity. Only by doing so can insurers meet the evolving needs of customers and thrive in an increasingly competitive market.

Are you an insurer looking to break from old-school thinking and dive into the world of digital transformation? Contact the team at CoverGo today, and one of our experts will walk you through how platforms like ours help insurers stay ahead of the game.

To survive the hyper-competitive market, it is imperative for insurance companies to deliver efficient services at a minimal cost. In fact, cost saving is no longer merely a good practice to embrace — it occupies the top position on every decisionmaker’s wishlist as it has slowly become a strategic priority. The pandemic has unleashed a financial strain that has forced insurers to look at streamlining operations with a leaner cost base. 

At the same time, traditional approaches are no longer enough to tackle the cost issue. In order to keep pace with changing customer expectations and intense competition, insurance companies need to use innovative methods for strategic cost savings. Realizing the potential of insurance technology is one means to this end. 

Here’s a look at ten ways in which the use of insurtech can have a huge impact on cost savings.

1. No code, No Cost

Launching new insurance products is an area where companies spend a chunk of their money. Traditional approaches involving programmers and developers turn out to be a money pit, with companies continuously spending on monolithic code systems and resources.

To save on product building costs, it is prudent to move to no-code platforms where simple drag and drop without a single line of code can create new products. You no longer need to spend excessively to recruit top-notch software developers or even spend months on developing new software — you can speed up the product development cycle and reduce sunk costs by supplying your existing team with no-code tools to simplify their work. Doing so also helps to save on s operational costs of rectifying errors and doing paperwork. 

With CoverGo, you can access an easy-to-use interface plugged with a variety of drag-and-drop tools that makes it incredibly easy for anyone to create custom-built insurance applications without any prior training in software development. 

2. Access to data insights 

Harnessing the true potential of data insights can be a game-changer for insurance providers. 

Research shows that investing in big data analytics can help companies save anywhere between 40 to 70 percent in costs as it automates several manual processes, and improves risk assessment and underwriting processes. This not only saves customers from paying hefty premiums but also prevents insurers from missing out on key risks and identifying fraud early on. In fact, it is estimated that in the United States alone, insurers have to deal with fraudulent claims costs worth USD 80 billion per year, which makes up approximately 10% of the total payouts. By employing data analytics, fraud-detection processes become quicker and more accurate. Companies can rely on historical data to prune out claims that are highly probable to be fraudulent and save on costs. 

Analyzing data trends can also help insurers better under the needs of their customers and suggest relevant products through a host of self-service tools. This can boost customer satisfaction and also help companies deliver a superior customer experience. Instead of spending a chunk of the marketing budget on pushing products customers don’t need, insurers can harness critical data and target customers with exactly what they need. 

3. Reduced cost of customer acquisition 

Historically, customer acquisition costs have been higher in the insurance sector due to hesitancy toward adopting digital technology. In fact, research shows that it is seven to nine times more expensive for insurers to get new customers compared to retaining existing ones. The focus has always been on investing very heavily in advertising to get noticed by more prospects. Except, the returns may not be worth it.

It is important to remember that every potential customer is looking for swift delivery, round-the-clock availability, and an easy-to-use interface when shopping for insurance products. They are looking for full transparency in pricing and the value delivered by the policy. Adopting the right technology can help insurers completely transform how customers view insurance, making it more approachable and easier to access. You can present a blend of product and pricing innovation to target price-sensitive consumers and retain them.

For example, using AI models for pricing can help insurers create unique dynamic pricing models for low-risk customers. So someone who doesn’t drive as frequently can buy a policy and pay a lesser auto insurance premium than those driving frequently. Even for such infrequent drivers, premium incentives can be provided on the basis of their driving behavior. By increasing the overall value of the product, companies can save big on acquiring new policyholders. And lesser it costs you to acquire a single customer, and the more value you provide, the more profit you can make. 

4. Improved customer retention

Retaining existing customers is just as important for saving costs as reducing the cost of getting new customers. Since the cost of retention is lower than the cost of acquisition, it should become a priority for insurance companies.

Insurtech can massively benefit insurers in retaining customers as technology makes it easier to roll out new products and policies, streamline the claims process, and provide effective customer service. 

In other words, bettering customer experiences is critical for cost savings. Bad experiences during customer service can force existing policyholders to shop for a new provider. But when insurance companies use tools such as predictive routing to match the right agent to the right customer, they can easily reduce the costs associated with customers reaching out to call centers for help. 

5. Improved innovation at a reduced cost 

While pursuing innovation is critical for outranking the competition, it should be pursued in a systematic manner. But cracking the code of successfully innovating without breaking the bank requires a little more than strategic planning alone.

Insurance companies that embrace digital technology can win big — not only can they reduce the bottlenecks in the product development cycle, but they can also roll out newer products much faster than their counterparts at a reduced cost. 

All the key facets of product innovation, including updating existing offerings, maintenance of existing systems, and undertaking incremental changes, can be experimented with without incurring the astronomical costs usually associated with it. 

6. Automation

Automating repetitive and time-intensive tasks by leveraging technology can not only make them more efficient but also help insurers make huge cost reductions. 

For example, policy management involves a lot of manual work for insurers. After the pre-underwriting checks are performed, they still need to deploy resources for issuing the policy and updating information within the system. During peak months, companies may be forced to hire temporary staff, increasing the company’s costs. 

Automating this process using an insurance automation solution that extracts key data points from all relevant documents and feeds them into the system in a structured manner can result in greater operational and cost efficiency. 

7. Reduced response times through chatbots 

Gone are the days when customers would flip through the FAQ section of the website to get their queries answered. In the age of microwavable popcorn, customers expect instant responses, and this is where chatbots can come in handy.

It is predicted that deploying more conversational chatbots on the website, and mobile app of insurers can help insurers save almost USD 1.3 billion by 2023. As digital native customers are increasingly expecting service providers to utilize the least disruptive ways to provide 24/7 responses, investing in inexpensive chatbots seems like a no-brainer.

Chatbots can also be configured to ensure that they provide actionable insights to the customer based on their queries instead of stalling the conversation completely as soon as the chat goes beyond the realm of answering FAQs alone. By delivering more efficient customer service, chatbots can reduce the scope for human errors and generate bigger savings in operational costs.

8. Predictive analysis 

Modern predictive analytics tools can comprehensively analyze different data points through techniques such as data mining, artificial intelligence, deep learning, and machine learning. Insurers can use the information to formulate underwriting and also optimize various business processes.

For example, predictive analytics tools can be used for direct marketing by identifying potential markets. Companies can also save on operational costs by not contacting such prospects who are unlikely to respond by getting the tools to analyze key demographic data that provides insights into the behavior patterns of such prospects. 

9. Embedded insurance 

Embedded insurance refers to products that are not sold to customers on an ad hoc basis but are provided by embedding them on a platform or a marketplace. For instance, every bank adding a complementary life insurance policy with every home loan provided is embedded insurance. 

Opting for embedded insurance helps insurers to lower their distribution costs as they can rely on partner distribution channels and their relationship with customers. This ensures that only those customers are targeted and offered insurance where it matters to them the most. It also helps companies build their presence in the market a lot faster and save on onboarding costs. It also results in lower premiums, incentivizing potential customers to buy more products. 

At CoverGo, you can use the insurance product builder with 500+ insurance APIs that can be easily integrated with any legacy or third-party system and embedded with different policies without a single line of code. 

10 – Implementing effective claims management 

Insuretech solutions help claim processes become superior and more cost-effective.

For instance, if someone calls to report that they have lost their three-year-old iPhone, the person handling the claim should be able to look up the item’s depreciated value at the click of a button.

 This can only happen when insurers standardize their processes, right from reporting the insurance claim to the various back-end activities involved in processing the claim. Identifying various inefficiencies and bottlenecks can create a massive impact on cost savings by preventing claims leakage. Insurtech provides an opportunity to digitize end-to-end processes by consolidating and modernizing them and introducing higher levels of automation. 

Conclusion

There is no “one size fits all” solution when it comes to embracing insurance technology for cost savings. What cost savings mean for different insurers depends on the context. But insurtech provides various avenues for optimizing the insurance model and reducing costs. These solutions are no longer simply good to have — they are beneficial for both insurers and end customers.

The insurance industry has undergone a massive overhaul thanks to the advent of technology. Regardless of the size of the business, companies across the globe are looking to add more capabilities and implement evergreen solutions to scale their business to meet the changing demands of their customer base. The investment in insurtech was a whopping $15.4 billion in 2021, almost double the amount raised in 2020.

There is an ever-growing demand for automated experience in every sphere of life, and insurance is no different. In fact, embracing these technology trends is the only sustainable way of getting an edge over competitors.

Curious to know which insurance technology trends will reign supreme in 2023? Here’s a list of 10 trends to watch out for:

1. No code software development 

 Survival in a hyper-competitive market demands that insurers constantly wow their customers. This can mean creating unique enterprise systems or getting a third-party developer on board. Given the cost of building something new from scratch and the perpetual shortage of quality developers, the first option may not be feasible. While third-party developers are more affordable, there can be quality concerns. 

This is where opting for no-code software development can be revolutionary for insurers of all scales and sizes. Compared to traditional programming, where manual coding is a must, no-code software development makes it easy for everyone to build an app without a line of code. Platforms such as CoverGo offer an easy-to-use interface equipped with a variety of drag-and-drop tools, making it effortless for someone without any training in software development to create custom-built applications. 

Apart from saving money, it also makes it easier for insurers to focus on developing products that address customer pain points and automate their workflows instead of getting stuck in endless product cycles even for releasing simple applications.

2. Embedded insurance 

Embedded insurance refers to real-time bundling and sale of insurance policies at the point of sale of a product or service. 

There is a gap worth $1.2 trillion, between the amount of insurance a customer should get and the insurance purchased. As getting a one-off insurance policy can be tiresome for customers, involving a fair bit of groundwork, embedding an insurance policy in non-insurance products is a great way to bridge the gap. For instance, auto-insurance policies can be sold along with the vehicle, minimizing the chances of customers not taking one, as finding the right policy suited to their needs can be time-consuming.

Embedded insurance can also make it easier for insurers to dive into newer markets and expand their reach. This trend can help established businesses make inroads into developing markets where selling policies to customers directly may be an uphill task.

CoverGo’s insurance product builder offers 500+ insurance APIs that you can easily integrate with any legacy or third-party system and embed different policies anywhere you need, without a single line of code. 

3. Omnichannel distribution

Creating a seamless omnichannel journey is essential for delivering a superior customer experience. 

Omnichannel distribution channels make it easier for insurers to offer personalized policy recommendations to clients as they can collect data through cookies and mobile apps. An omnichannel ecosystem also allows insurers to assist the customer through each stage of their journey and learn more about a customer’s action that directly impacts the insurance policy they wish to get. 

Any insurer wishing to stay relevant in 2023 must work towards a user-centric and omnichannel strategy. This includes making it easier to purchase policies online, navigating through customer journeys quickly, and integrating sales and support solutions. Insurers should also understand that digital initiatives are not yet another channel to reach out to customers — they can be the merging point of online and offline worlds and can be leveraged to deliver a highly personalized experience. 

For instance, a true omnichannel experience can be when a prospect can scan a barcode from the documents of their new car, upload it on a portal, and instantly receive insurance quotes.

With CoverGo’s front-end enabler, insurers can build flexible and responsive front-end websites, microsites, and client or agent portals within a few days without any code. These white-label front-end applications can then be used for instant omnichannel distribution.

4. Internet of Things

The Internet of Things (IoT) is all about embracing digital transformation in the insurance industry. A McKinsey research reveals that there are approximately 127 new devices plugged into the internet every second, and there will be 43 billion devices by 2023. 

 If you are serious about delivering a better customer experience and boosting brand loyalty, you need to allow IoT devices, such as wearables, home, and automobile sensors, etc., to access relevant data relating to the policyholder and distribute it through your network. This can help to speed up the claim process and minimize duplicate work. You can save a customer’s time by letting the devices fetch sensitive data and deliver it to your interface to handle the claims more effectively. Forbes predicts that IoT can also help insurers to reduce the cost of the claims process by 30 percent. And the good news is that IoT can work for any type of insurance business, whether you sell life or casualty policies or straightforward commercial ones. 

IoT can also make the risk assessment process more accurate and allow policyholders to work out the policy pricing. 

5. Chatbots 

Chatbots are a powerful tool for current insurers to help them meet customer expectations. Investing in developing sophisticated chat widgets powered by bots can substitute live agents and make customer service more seamless. 

Here are some other ways in which chatbots are beneficial for the insurance sector:

• They offer round-the-clock assistance to customers

• They can collect visitor information

• They can help to qualify leads and show them appropriate policy recommendations

• They can answer FAQs about policies offered

• They can automate the claims process 

In 2023, insurers can place chatbots on their website and app. Based on requirements, chatbots can be either AI-powered (using natural language processing to provide the right answers to user questions) or rule-based (operating as per pre-defined flows).

6. Artificial Intelligence (AI)

When it comes to delivering a personalized experience in the insurance sector, AI will play a massive role. From distribution to underwriting risks, there is virtually no aspect of the business that cannot benefit from adopting AI. 

 When it comes to processing massive amounts of customer data to provide a curated and customized offering, leveraging AI can be a game-changer for insurance companies. Moreover, reduced churn time and removing the human element aids in real-time service delivery, which is key for customer retention. 

The deluge of connected consumer devices such as smartwatches, smartphones, home assistants, and cars can provide insurance companies with all the relevant information about a potential customer’s profile. Using AI algorithms, companies can create risk profiles, identify the exact product to offer, and reduce the purchasing time to just a few seconds. 

AI will also play a key role in claims processing, which has been a significant bottleneck for most customers. Utilizing appropriate AI solutions to remove agent intervention for filing claims, deploying more virtual assistants for handling low-cost but high-volume claims, and implementing NLP (natural language processing) for extracting relevant text from printed documents to streamline the claims process can be transformative. 

7. Predictive analysis 

Embracing predictive analysis can go a long way in improving the accuracy of insurers, especially those offering property and casualty coverage. 

It can also help identify outlier claims that suddenly become high-cost losses. Using predictive analysis, insurers can thoroughly review claims raised previously for similar losses and identify potential complications early on. 

Additionally, predictive analysis can provide insurers with relevant data for identifying various factors that can impact the claim outcome and make decisions to enhance efficiency. In turn, this can streamline the claim process and mitigate the risks that traditional claim processing poses. 

8. Telematics 

In simple terms, telematics for insurance means offering usage-based coverage. This can be offered as a wearable tech for car insurance policies. Insurance companies can comb through the analytics and work out the policy premium by equipping the car with monitoring devices. They can offer flexible plans such as pay-as-you-go (based on mileage) or pay-how-you-drive (based on driving behavior). Moreover, since most customers have a GPS-enabled smartphone with them while they are driving, insurance companies can also partner up with GPS providers to collect relevant data about the driving habits of the customers.

Telematics benefits both auto-insurers and policyholders. For insurance companies, it offers an excellent opportunity to know about the driving behavior of customers even before they start looking for auto insurance policies. Additionally, inking insurance premiums to actual usage helps insurers offer better premiums to their customer, leading to greater customer satisfaction. Gaining deeper insights into customer profiles regarding their driving habits also enables insurers to estimate the damages more accurately and minimize fraudulent claims. 

For policyholders, telematics promotes better driving habits and incentivizes them to pay closer attention to vehicle usage. Customers are not forced to pay an arbitrary amount as a premium, as the calculation is done based on usage or driving behavior. 

9. Drones

Drones are no longer restricted to military or security operations. 

Since 2017, when Hurricane Harvey hit the US, insurers have been employing drones to expedite the claims process. Over the years, the popularity of drones in the insurance sector has soared, and predictably, more insurers are likely to embrace unmanned drones by 2023. Moreover, as clients expect a seamless digital insurance experience, insurers can gain immensely by embracing state-of-the-art technology for their business. 

The biggest advantage of using drones is that insurers can access high-quality videos and images from locations that may be otherwise difficult to access. Speedy access to such critical data can be extremely helpful for claims processes arising out of property & casualty insurance policies. As drones make it less risky to inspect damaged properties, surveyors working for insurers don’t have to risk their lives to decide on the claims. Streamlining data access through drone footage can increase efficient reporting and also ensure accurate evaluation of the damage caused. This can, in turn, avoid disputes regarding the insurance payout. 

10. Greater self-service capabilities 

Opting for self-service portals to improve customer experience is predicted to become an important trend in 2023. Such portals can simplify how policyholders get their insurance, management of claims, insurance accounting, and premium payments, and ask questions about different policies. 

For tech-savvy customers, where 72.7 percent prefer applying or renewing policies online, and 57.6 percent expect their insurers to offer digital policy management, self-service portals can be an excellent trend to follow. 

Adapting to appropriate software solutions for self-service can also bring down the cost of customer acquisition and boost retention. It can also improve agents’ productivity by freeing up their time otherwise spent consulting with the customer.

Conclusion

To sum up, the insurance industry must keep up with technological developments expected to be game-changers for 2023. The faster they adapt, the more likely they will remain relevant. The trends shared above can completely transform your relationship with your customers. So what are you waiting for? Act right away to strengthen your market position next year.

Frequently Asked Questions

What are Insurtech trends, and how are they shaping the insurance industry?

Insurtech trends refer to the innovative technologies and digital solutions that are transforming the insurance sector. These trends include artificial intelligence, blockchain, telematics, and data analytics, among others. They are reshaping how insurance companies underwrite policies, process claims, and interact with customers, ultimately improving efficiency and customer experience.

How is artificial intelligence (AI) being used in the insurance industry, and what benefits does it offer?

AI is being employed in various ways within the insurance sector, such as automating claims processing, enhancing risk assessment through predictive modeling, and personalizing customer experiences through chatbots and virtual assistants. AI-driven automation reduces operational costs, minimizes fraud, and speeds up claims processing, ultimately leading to cost savings and improved customer satisfaction.

How are telematics and IoT devices impacting the insurance industry, particularly in auto and property insurance?

Telematics and Internet of Things (IoT) devices, such as vehicle sensors and smart home devices, allow insurance companies to collect real-time data on customer behavior and risk factors. In auto insurance, telematics devices track driving habits to provide usage-based insurance, while in property insurance, IoT devices can detect and prevent damage, leading to more accurate pricing and reduced claims.

What role does data analytics play in the evolving landscape of insurance technology?

Data analytics plays a crucial role in insurance by helping companies analyze large volumes of data to make informed decisions. Insurers use predictive analytics to assess risk more accurately, set premiums, and detect fraud. Customer behavior analytics enable personalized product recommendations and targeted marketing efforts, enhancing customer engagement and retention.