5 Trends in Insurance Technology For 2022
The Covid-19 outbreak was a turning point for the worldwide insurance industry. The way the entire sector saw its future was drastically redirected around the year 2020. The year 2022 will move the industry farther along the road to massive digitization for the customers after the recovery phase in 2021, where the goal was to fulfill updated customer expectations.
The pandemic accelerated a process already catalyzed by technical developments, significantly negatively impacting the sector. People imprisoned within their homes gave greater business to carriers who quickly adjusted to the demands of changing times.
The year 2022 will undoubtedly keep upsetting the current quo. Experts and their upcoming year’s prediction says 2022 will be bold, and the traditional procedures need a makeover.
Here are the top five trends in insurance technology for 2022.
1. Automated Underwriting and Claims
In the past, traditional underwriting involved the appraisal of an insured person. It was a problem during the pandemic, and many insurers were forced to adopt new underwriting techniques.
The scenarios have changed due to innovative insurance technology solutions like Automated underwriting. It aims to expedite data collection and minimize the number of human touchpoints. Robotic process automation and artificial intelligence are used in automated underwriting to integrate and update data, assess risk, and decide client coverage needs and premiums.
Automated underwriting programs also consider an insurer’s business regulations to stop the process when a human review is necessary. For this purpose, a detailed set of roles and permissions should be possible with automated underwriting technologies. Numerous insurers have integrated automated underwriting into their value chain due to the advantages of saving time and money.
AI is being used more often, and digital claims have enabled carriers to optimize fragmented claims management procedures, speeding up processing and decreasing claim wait times. Automation has already taken the place of more than half of claim-related operations. Digital claims have helped to achieve the greatest satisfaction scores ever evaluated by The J.D. Power U.S. Property Claims Satisfaction Study by cutting the average payout time by up to 5.5 days. Automating claims can also help insurers increase consumer product sales.
2. Cloud Computing
The pervasive usage of on-premise legacy data storage systems impedes technological development in the insurance sector. Despite early reluctance to give up their on-premise systems, this has changed over the past five years as more insurers adopt “cloud-first” infrastructure plans. In fact, in the upcoming year, 75% of insurers want to increase their usage of cloud computing.
Unquestionably, the switch to cloud-based storage would give many insurers a flexible basis, enabling breakthroughs in everything from creating new products to tailoring client experiences.
Additionally, introducing hybrid cloud solutions may completely alter the insurance industry by offering several advantages for deployment and collaborations. With the ability to interact with third-party tools and systems, hybrid cloud platforms would keep the insurance industry’s door open to new business options.
3. Introduction of Low-Code/No-Code Development
One of the imperative developments is the business IT industry’s acceptance of low-code/no-code development Enterprises. For the most part, they continued to rely on the traditional development projects driven by internal resources or outsourced integrators. In contrast, no-code solutions became the new standard in the SMB category.
However, the availability of mature, enterprise-grade no-code technologies prioritizing compliance and security is beginning to change this. So, while still maintaining governance and control, businesses may now outsource some of the development burdens to line-of-business users.
The fact that these products address some of the most pressing problems faced by IT teams is the reason for their rising popularity. No-code technologies increase the effectiveness of overworked internal personnel, decrease backlogs, and boost production.
The most significant characteristic that distinguishes no-code tools from conventional development projects is the shortened time to promote new digital apps and products. With no-code technologies, insurers can now provide better apps more quickly, boost client satisfaction, and raise the standard of their services.
4. Artificial Intelligence (AI)
Artificial intelligence (AI) is becoming widely used, and there are now many AI-capable gadgets in households worldwide. According to Deloitte Digital research, as of 2017, more than 35.6 million individuals in the United States had voice-activated AI assistants. Experts predicted that by 2020, the global market for these technologies would be worth $47 billion. So how can the insurance sector use this pervasive and available technology?
Particularly when purchasing something as crucial as P&C insurance, consumers are constantly seeking tailored experiences. With the help of AI, insurers can design these distinctive experiences that satisfy the fast-paced needs of contemporary customers. The secret is to harness AI’s ability to make the most of the vast amounts of consumer data that are already accessible to develop customized user experiences based on a person’s behavior and habits.
In addition, insurers may use AI to speed up claims processing and fundamentally alter the underwriting procedure. Insurance companies can now access data more quickly thanks to AI, and removing the need for human intervention may result in faster, more accurate reporting.
5. The Rise of InsurTechs and Microservices
You will continue to witness the development of integrated and targeted solutions as several insurers look into long- and short-term strategies for their digital transformation journeys. Since InsurTech is producing more specialized solutions than ever, insurers’ reliance on monolithic systems is ending.
Through the use of microservices, several insurers are aiming to deconstruct their core systems and auxiliary activities. Microservices are designed to separate programs into smaller business functions, such as payment or early notice of loss. They may approach each organizational function as a separate module to build and manage over time. Through application program interfaces, these modules can communicate with one another (APIs).
It was difficult to break down core systems since many microservices were challenging to interact with and had inefficient operations. With the advent of new technologies, more of these contemporary integration designs work well with well-known core systems like Duck Creek, Guidewire, and Majesco.
Insurers are beginning to develop a technological ecosystem that streamlines vital business procedures, decreases the time it takes to embed predictive analytics, launches innovative insurance products, improves client satisfaction, and boosts operational effectiveness.
Global adoption of the insurance sector trends mentioned above is ongoing to enhance services and streamline operations. Insurers keep up with the most recent developments in insurance technology by collaborating with InsurTech firms. Both the insurer and the consumers benefit from these cutting-edge insurance technology solutions. Furthermore, eliminating fraud and automating servicing can lower operating expenses while providing insurance agents more time to build and keep clientele.