The US insurance market is experiencing transformation at a rate faster than one expects. Over the years, the transformation has been induced by fast changing customer demands, proliferation of requirements, improved connectivity etc. These factors have always remained a constant and with each passing year have assumed new and complex dimensions. In 2020, these factors will once again have a major bearing on the trends.

This year, like every other year, the insurance industry will take new strides to explore opportunities to grow and at the same time offer greater convenience to people. While on the one hand it will embrace new technologies like Intelligence Process Automation (IPA) to make processes leaner and fast on the other it will seek to grow leveraging new age connectivity solutions like micromobility.

IPA Will Drive the Industry in 2020

Over the last few years industry trends in the insurance industry have primarily been driven by Data Analytics and Automation. These technologies have now evolved to give way to a more advanced form of automated technology called Intelligence Process Automation (IPA). This year, most insurers will be exploring the possibilities of streamlining their business with this technology.

The technology comprises handling major processes with bots equipped with computer vision and other cognitive capabilities like Natural Language Processing (NLP). These highly advanced bots are capable of improving process turnaround times by 20 times thus helping insurers get rid of backlogs and process related delays once and for all.

Why IPA Will Be the Cornerstone of Insurance Technology

  • Smart Workflows: IPA benefits critical business processes such as claims automation by importing customer data from CRM systems to validate and archive them. IPA bots can scan and digitize customer information and contract terms of an insurance policy. Their ability to distinguish between claims and route them to the correct repository is the new advantage that will make a huge difference to claims quality and turnaround times.
  • Cost Reduction:  The added ability of IPA bots to discern from different documents gives it the ability to automate more than one process at a time. This is a stark contrast to the linear nature of RPA that could handle only single pre-programmed tasks. The improvement in the overall operational efficiency of the insurance claims process helps insurers reduce costs in the long run.
  • Process Diversity: The learning abilities of IPA software suites enable insurers to automate more advanced tasks such as making the decision to send out emails to the customer after validating the subscription information of their insurance policy. The same bot would also notify internal employees to follow up with the said customer for policy renewal.

MicroMobility: A New Opportunity for Insurers to Grow in 2020

Micromobility is an industry that is driven by disruptive technology. Conventional insurance businesses do not provide coverage for users of electric scooters for insurance. There has been much to discuss who pays for damages caused by these new modes of transport.

Since micromobility users are susceptible to the same risks that vehicles covered by automotive insurance, and that the industry would continue to evolve and attract customers at an exponential rate, the need for insurance has been established. Therefore, in 2020, insurers will focus on managing the insurance requirements of the new age industry.

Why Insurers will Tap into Micromobility in 2020:

  • New Opportunity from a New Market: With micro mobility insurers have a brand-new opportunity to grow their business. Electric Vehicles (EV) are the future and sooner or later insurers have to be ready to provide coverage for all forms of micromobility vehicles. In 2020 insurers will come with new policies to target this section.
  • Large and Growing Volumes: The number of micro mobility users is growing by the thousands. Insurance companies have the option to diversify their business by providing coverage for a swiftly growing vehicular segment. Therefore, vehicle insurance is all set to grow this year.
  • Opportunity to Emerge as Market Leader: Not many insurance companies have tested this new market. Insurers who offer great coverage with equally good customer service can cement their reputation as a pioneer in the segment. With this in mind competition to attract micromobility customers is likely to increase.

In 2020, the Insurance Industry will Embrace Telematics to Reduce Losses

TELEMATICS is a method of monitoring a vehicle like a car, truck, heavy equipment, or even ship by using GPS and onboard diagnostics. In 2020 the insurance industry will go all out to embrace this technology. By using telematics, automotive insurance providers can monitor the driving habits and vehicle condition of a customer. As telematics leverages a blend of information technology and telecommunications to track vehicular activity, insurance companies will make use of this data to profile the risks associated with an individual. Although it is a radical new concept that requires the cooperation of the policy holder, it has a lucrative cost incentive associated with it.

Why Telematics Will be a Driving Trend in 2020

  • Reduces the Costs of Owning Insurance: Automotive insurance policies issued to drivers accountable for road safety have to pay very less premium for their insurance. If more customers adapt this new insurance trend, it will significantly increase policy sales. Likewise, it will help insurance companies reduce possible losses by not issuing out policies to risky drivers
  • Gives Safe Drivers an Incentive:  Drivers who are committed to road safety can earn huge savings in auto insurance costs. This serves as an incentive for them to remain committed to safe driving habits.
  • Promotes Safety: Vehicle drivers are always seeking good insurance policy at cheaper rates. Since drivers have to establish their risk profile in real time by consenting to insurers, it promotes over all road safety and reduces payments that need to be made due to accidents.

In 2020 Drones will Add a New Dimension to Claims and Loss Run Validation

Insurers who specialize in land and agriculture deal with high stakes. They are liable to pay hundreds of thousands of dollars in case of a claim. This calls for a concerted effort that begins with an examination of the land or property. Farmers insurance is a fine example of how unmanned aerial vehicles (UAV) can be used to assess risks.

To counter this, Insurance companies will increasingly seek the help of private drone pilots or aviation companies to assess property damage dimensions and determine the premium amount for the customer. This would give them a good understanding of the costs associated with property development and maintenance.

How Drones Will Change the way the Insurance Industry Operates

Safety: The federal laws of many states in the United States require periodic inspection of boilers. Some industrial boilers are several stories high. Their sheer size makes them difficult to inspect them adequately. With the help of drones, insurance companies can find an ideal way to inspect these structures safely and in full measure.

 Fraud Detection: Property insurance providers are no strangers to fraudulent attempts to claim a policy. In the event of a natural calamity it is difficult to assess the validity of the claim. The property for which claims are initiated may have sustained damage before. Any drone videos of the locality and of the property before the calamity would vastly help insurance companies detect such frauds.

Cheap: The use of drones greatly reduces inspection costs. This is because, a proper aerial view of the structure is good enough to have a comprehensive assessment of the structure. It costs a lot less to have a drone fly and examine a property than have an agent make an onsite inspection of the property.

In 2020 Industry Will Rely More on Voice Based Personal Assistant for Enhanced Customer Experience

Siri and Google personal assistant gave mobile phone users a fun and highly interactive tool to look for information on the internet. Insurance companies will leverage such interactive features along with their existing communication channels such as email and customer portals to enhance the customer experience.

In 2020 most insurance companies will integrate voice assistant APIs to their communication platforms. These features can range from support for voice-based queries to full-fledged personal assistants that can act as a virtual receptionist when a customer calls to the insurer’s customer care number.

How Voice Assistants Will Give Payers an Edge

Interaction that Feels Natural:  Google’s personal assistant is capable of taking appointments from customers on behalf of a reception desk. It does this flawlessly without the caller realizing that it is actually a voice assistant on the other side. This impressive technology will be embedded by insurance companies into their mobile apps and online portals to provide customers a memorable and a smooth interaction about services and queries.

Faster Service Time: Voice assistants can work more efficiently than humans do. It is precisely because of this that most insurance companies will go all out to adopt voice assistants in 2020, irrespective of the huge costs involved. Payors who have started adopting voice assistants in 2019 have made the life of their customers a lot easy. They no longer have to keep customer calls on hold to speak to a customer support executive.

Stepped Up Efforts to Automate Claims Processing, Loss Run Renewal and Policy Checking

Insurance companies spend a considerable amount of time and money in checking policies and processing claims. Every time a customer changes carrier, the new insurer runs a loss run report which details the number of claims made by them in the past. The loss run report is vital tool to determine the premium for a customer.

Insurers have been trying to reduce the efforts required by these processes for many years now. Their goal was to automate sizable chunks of these mundane tasks to speed up the process without compromising on the accuracy of the processes.

The year 2020 is set to introduce the following important trends to this long-standing goal of insurers:

Use of Centralized Loss History Database: Most insurers will start tapping into community-based data entry to validate loss run reports. It primarily involves running a software through a centralized resource that records loss history based on entries made by individual contributors.

In exchange for their efforts, every contributor gets access to the repository on demand. Such a set up helps underwriters and insurance agents validate the loss history without having to resort to the traditional, manual method of loss history collection mostly with the help of third-party agencies.

Automated Organization of Unstructured Data: Data validation and data storage are two of the biggest challenges that insurers encounter with automation. The process of using RPA bots and software suites with text reading technology such as Optical Character Recognition (OCR) to automate date entry already exists.

The challenge lies in making them more efficient and accurate enough to decide on their own. Newer automation models that involve neural networks to recognize customer and insurance data to make decision will be central to insurance automation in 2020. With advancements in big data analytics frameworks and data storage hardware, bots that are already automating policy checking and claims processing will get smarter.

Cognitive Excellence: Technologies such as Predictive Analytics and Natural Language Processing have opened the doors for cognitive functions. While these technologies have been experimented time and again in the industry, this year Insurers will go all out to incorporate these technologies to aid important functions such as policy checking. Insurers will strive to develop self-learning systems to program the system to distinguish customer policies that need renewal from the ones that need an upgrade or fresh subscription. Further Insurers will explore the possibility of using cognitive functions to enhance and streamline insurance policy generation process.

To sum it up, in 2020, the insurance industry’s roadmap to growth will be largely designed by preventative, protective as well as pro-active measures to expand and stay relevant with time.

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Insurance BackOffice Pro is a leading ISO 9001:2008 certified company offering global business services for insurance back office support, data management and research & analysis.  We have partnered with our clients for over 3 years, to negotiate the many ups and downs of the industry. It is through this journey that we have acquired an instinctive understanding of how developments in the industry are likely to pan out.