How Is New Technology Disrupting Insurance?
Throughout history, technology has revolutionized industry. Innovations like the printing press and the steam engine have allowed society and industry to progress and improve. Over the last 2 decades, technology has done the same for the insurance industry. We’ve seen high-tech innovations enable customers to self-serve in new ways, from getting quotes to filing claims and managing their policies—all online. But it doesn’t end there.
After all, from data collection and claim processing to underwriting and customer service, there are many areas of the insurance industry that are more than ready for innovation. Thankfully, there’s technology released practically every quarter that’s helping to make insurers more effective than ever at understanding customer pain points—and then solving for them. Here’s how technology is disrupting the insurance industry and improving processes from end to end.
Artificial intelligence (AI) is becoming an essential component for many industries. According to a Forbes study, 84% of enterprises believe investing in AI will lead to greater competitive advantages. Seventy-five percent believe that it’ll open doors to new business while also providing competitors new ways to gain access to their markets. The potential for AI is exciting for professionals in every industry, but AI can benefit insurers in a number of ways:
- Automatic damage detection. Insurance adjusters need ways to assess damage. For a long time, adjusters have identified damage by looking at pictures of that damage. But when AI technology assesses these photos, damage is automatically detected. AI can detect and identify small damages like a hail indentation on a roof, which the human eye may not be able to detect. With this type of technology, insurers can be confident that their estimate is accurate and their customers are compensated fairly.
- Fraud avoidance. AI is also a great tool to help insurers avoid fraud. Fraudulent claims cost the insurance industry $40 billion per year, and as a result cost the average family $400 to $700 per year, according to the FBI. AI gathers the small details and tells an unbiased story, which enables both the customer and insurer to understand the important details of a loss.
- Customer service. Insurers have also discovered other ways that AI can make things more efficient – namely, customer service. In the new age of digital technology, people want things done faster. Unsurprisingly, 74% of consumers say they would be open to computer-generated insurance advice if it were more efficient and offered a lower premium. This customer service is commonly used in chat bots on company websites that can answer frequently asked questions and assist customers efficiently.
These chatbots can help people do everything, from getting a quote to filing a claim. This technology is particularly valuable when a natural disaster strikes and customer service agents are overwhelmed with calls.
Drone technology usage has steadily been on the rise. In fact, the FAA predicts that by 2020, seven million drones will be flying over North America. Drones are also building a reputation as the ideal tool for insurance adjusters. Here are a few ways drones are helping to improve insurance.
- Faster inspections. Using a drone for inspections keeps adjusters out of harm’s way while enabling them to inspect a property in record time. Traditional inspection methods take hours — and sometimes more than one person. With a drone, a single adjuster can inspect a roof or other hard-to-reach parts of a property in under 20 minutes. This means more time for adjusters and quicker claims for consumers.
- Small details. Along with the speed and safety benefits, drones help insurers be more precise. A drone can scan a property in high definition and reveal even the smallest hail strikes. Drones can also gather measurements of a structure with up-to-the inch accuracy. Remarkable levels of accuracy help insurers create thorough reports for the claims process.
- Less equipment. When field adjusters use traditional inspection methods, they’ll likely need equipment like ladders, helmets, digital cameras and tape measures. A drone performs the tasks of all these pieces of equipment. Drones take high resolution photos of a property’s exterior from various angles, gather accurate measurements and keep adjusters on the ground so the ladder and safety gear can stay behind.
- Thermal technology. Some drones have thermal technology that gives insurers the ability to see water damage beneath the surface, where the human eye can't detect it. Thermal drone inspections are already being performed on residential and commercial properties.
- Customer relations. Drone technology creates transparency with customers. When a drone gathers the data, it's unbiased, accurate and easily shareable with the customer. This allows customers to understand what parts of their property were damaged, so misunderstandings don't happen.
Full Solution Disruption
AI and drones are two revolutionary technological innovations that continue to prove their worth for insurance. Each comes with its own benefits to the insurance industry, but when used together, they have the potential to disrupt the way insurance companies do business.
Take a drone for instance. In its simplest form, it’s a flying high-resolution camera that enables claims adjusters to assess damage quickly and easily without endangering themselves. AI, on the other hand, makes processing data much more efficient, but lacks a way to collect that information in the aftermath of a loss. But when paired together, these technologies create an end-to-end solution that uses AI-powered software to process the data collected by the drone. The two technologies can work together to change the way insurance companies manage claims.
A New Way Forward for Insurance
By employing innovative new technology and not relying on the status quo, insurance companies have the opportunity to not only streamline their internal processes, but to make customer experiences simpler and more seamless than ever. While the industry has come a long way from the neighborhood agent model, there’s always room to continue innovating, and technology continues to offer new ways to make insurance surprisingly painless.