The advent of Artificial Intelligence (AI) is changing the way many industries operate; there’s no escaping it. Even the insurance industry is facing change, thanks to the creation of Insurtech, aka Insurance Technology.
What is Insurtech?
Insurtech is a term for a broad range of technology, all of which is applied towards the insurance industry. More specifically, it’s the use of artificial intelligence and blockchains in the insurance industry. This applies to car, medical, life, and home.
Insurtech was created to save insurance companies money, streamline the process, and make better and customized customer service. In the last few years, the Insurtech industry has boomed. New startups and older businesses alike are competing to create the best models, and it’s altering the way we look at insurance.
What Are the Different Types of Insurtech?
There are now several different types of Insurtech, a variety formed from the many different needs of the insurance industry. Each style has a different specialty, and there’s no need for mutual exclusivity between companies and types.
- Artificial Intelligence/Machine Learning – Used for personalized services, competitive pricing models, predictive analytics, and chatbots.
- The Internet of Things (IoT) – IoT is used for omnichannel communication and telemetry-based insurance policies and claim processing.
- Blockchain – Used to prevent fraud, create smart contracts, and help to track sensitive data.
- Robots/Drones/Etc. – Can assist in designing programs, plans, find risk factors, operate where it is unsafe for humans, and create automation.
How Does Insurtech Work?
The end goal of Insurtech is convenience and efficiency. This technology has been designed to help both internally and externally. Meaning that the insurance companies and their clients both gain an advantage through its use.
Theoretically, Insurtech will make insurance more accessible, lower costs, decrease wait times, and allow for customized claims. All while reducing payroll costs, as there isn’t a person behind all of this.
What Are the Benefits of Insurtech?
Many of the benefits for Insurtech have already been mentioned above. They include: customized insurance policies, reduced run costs for insurance companies, better claims management, and better customer-facing tech, including apps and chatbots.
What Are the Concerns of Insurtech?
As with any rising technology, there will naturally be some concerns to go along with it. The dominant concern regarding Insurtech is privacy. Consider all of the private and sensitive information that insurance companies must collect and store. The introduction of any new technology always increases concern regarding the safety of this sort of information.