Insurance Technology that Drives Revenue
Using the right technology can minimize fraud, automate services which lower operational costs and drive revenue. Innovations in insurance technology benefit both insurers and their policyholders— whether through promoting healthier lifestyle choices or offering a seamless onboarding experience.
Internet of Things (IoT)
With new advances in insurance technology, insurers today have to manage risk while promoting healthier behavior. The use of technologies that transmit data in real-time has exponentially grown in recent years.
One such example is the Internet of Things (IoT). IoT describes the network of devices with built-in software that automatically exchange data with other devices via the web.
Wearable tech such as fitness trackers along with smart home appliances has contributed to an explosion of useful information.
Insurers can take advantage of the real-time data they receive from various devices to set better rates, minimize risk and losses.
Machine Learning
Machine learning uses sophisticated algorithms to process data without assistance from a human programmer. Eventually, the machine learning-powered software can independently reach conclusions and make decisions.
Machine learning algorithms automate critical operations including calculating rates, underwriting, handling claims processing, and fraud detection.
The Problem with Machine Learning
Machine learning solutions are susceptible to the black box problem. This is a risk that most companies can’t accept. Basically, after some time, the decision-making and reasoning of the algorithms become impossible for human developers to follow.
You will be hard-pressed to find any company (much less an insurance carrier) that thinks not having a clear overview of all of their decisions is acceptable and doesn’t pose a risk.
Blockchain
Blockchain will forever be tied with bitcoin in the minds of most people. Blockchain is a digital ledger platform that stores records and transaction data on a network, which can never be deleted. It builds trust between parties without relying on an intermediary.
However, insurance companies looking to use blockchain face huge regulatory and legal challenges. After all, the insurance industry is very conservative — it took the industry a lot of time to start using cloud computing.
The Importance of Business Rules Engine
A business rules engine is a user-friendly software solution that enables insurance companies to place powerful capabilities into the hands of non-technical subject-matter experts.
Competitive insurance companies need to make updates to current insurance products and get to market with new products instantly and without mistakes. This used to require the expertise of a senior software developer, recently, however rules engines have disrupted the industry.
Non-technical insurance agents can instantly come up with and manage new insurance products in mere minutes!
Rules Engines and IoT
Insurance carriers need to effectively manage the huge volumes of data they gather from IoT devices. That is to say, they need a software tool that enables them to make changes and introduce new rules.
What insurers need is a business rules engine. Contingent on the privacy settings customers choose, carriers can notify their policyholders of potentially risky events by sending emails or text messages.
For example, the temperature in the house is too high and the fire alarm hasn’t been set off which means that the policyholder should make sure everything is fine.
The insurer can partner up with policyholders to help lower risk and minimize costs by using real-time data from IoT devices.
Conclusion
These software tools give insurance carriers the ability to redesign everything they do — from customer service, product development, and establishing prices to underwriting and fraud prevention.