Many industries have embraced digital transformation and the insurance industry has also started following suit. Focusing on offering additional services aided by technology to help retain and attract new customers has become imperative for the insurance industry. Technology has the potential to make a huge impact on this industry.
Insurance agencies need to focus on targeting the right customer segments for their product offerings, in order to offer customized solutions. This is where high-end InsurTech technologies can make a difference. This blog talks about how connected insurance has the potential to transform the insurance industry as we know it
Importance of Connected Insurance in the Modern Insurance Domain
New and advanced technologies have begun dominating recent conversations about the potential future of the insurance industry. Forward-thinking and strategic insurers are looking at disruptive innovations to re-imagine the relationship between the insured and the insurer.
One specific domain that has turned things around is connected insurance. Read on to know how connected insurance has the potential to bring new life to the insurance industry.
Connected Insurance -A New Way to Connect with Customers
Conventionally, a customer only thinks of insurance when there is a major event or while he/she is making a major purchase -whether it is purchasing a vehicle, a home or filing a claim. In recent times, insurers have shifted their focus from offering protection for unfortunate events to help prevent them from taking place, and connected insurance has a big role to play in this.
While insurers traditionally delivered products depending on the risk profiles of customers, connected insurance will require them to focus more on the lifestyles of customers. An on-demand model for connected insurance is more hands-on for the client. You can buy or update your insurance cover at any time through your mobile phone or digital service provider, and your policy changes will be made based on real-time data.
Insurers who pursue a connected insurance approach should focus on specific customer segments while developing an in-depth understanding of the customer type they are targeting. They should then look at relevant ways to integrate connected insurance into the lifestyles of these customers.
Technology makes lifestyle-integrated interactions a lot easier. Advanced technology capabilities along with the increasing availability of customer-centric devices including IoT (Internet of Things) appliances, smartphones, health monitors and more are allowing end users to manage their day-to-day lives online.
Role of Technology in the Insurance Business
Real-time Risk Monitoring: A major benefit of digital insurance is its ability to monitor events in real-time. This can reduce the likelihood of claims and claim inflation. A real-time use case of this is the automotive industry. Connected cars use telematics to collect critical data about vehicle usage and driver behavior. Insurers have started leveraging these systems through AI-driven apps to receive automatic alerts. In case there’s a mishap, the app directly sends images from the accident site to the insurer. Its claims evaluation component reviews this information and recommends the next steps to the driver.
The modern automotive industry delivers higher quality and quantity of data using connected insurance. Some benefits that can be observed are:
- Increased use of preferred car parts for repair
- Lower expenses related to loss adjustment and claims settlement time
- Improved claims evaluation
- Minimization of fraud and inflated claims
Claims Prevention and Changes in Behavior: Carriers can continuously monitor the risks involved while influencing them in real-time. Adopting an indirect approach to promoting safe behavior also becomes crucial.
Claims Prevention and Greater Engagement: Another key benefit of connected insurance is the ability to prevent claims due to improved engagement and interaction with the policy holders. High-end technology allows insurance carriers to engage a lot more effectively with customers. Customers, in turn, are happy to interact with the insurance providers.
It is estimated that around 46 percent of consumers will be willing to pay more for real-time, personalized services. They would also be willing to share more personal data. It will increase as the value proposition of exchanging vital data becomes more concrete.
Understanding how connected insurance can minimize the existing bottlenecks can go a long way towards improving the solutions offered. The ability to collect more information about a specific claim will also help in preventing fraud. The end result can be improved profits for organizations and reduced premiums for customer
Key takeaways of the Connected Insurance Ecosystem
Digitization of Insurance: To understand the importance of digital products, the entire organization should be digital. Everything from the actual calculation of risks to product development to marketing, claims settlements and customer services should be digitized.
Selling More Than Just Insurance: IoT for insurance can successfully minimize the cost and frequency of claims and also help minimize the cost of premiums. Over time, carriers can become adept at devising services using data flowing to the organization’s servers from IoT devices in vehicles, homes, and offices.
Conclusion
Insurers need to come up with various new methods to connect with end users. Connected insurance leverages technology to its optimum to make the insurance agent an important partner in the life of customers, while offering emergency assistance and seamless support.
Exdion, a highly acclaimed technology transformation partner for brokers, uses the latest aspects of connected insurance to enable deeper customer relationships and empower brokers to deliver a seamless customer experience. Get in touch with us to use our new-age technologies and build smarter, leaner solutions for your insurance business.