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Automation Featured General Insurance

Insurance is defined as the pooling of resources by many to compensate the few faced with named risks. In legal terms, it is a contract in which the insurer agrees to indemnify the insured upon the occurrence of a specified event, in return for a payment called premium. 

Like many contracts, terms and conditions are stipulated to govern it. But with the advent of technology, today, the insurance contract can be entirely digitized. This allows for entire processes like claims to be done autonomously. The technology making all this possible is blockchain.

Smart contracts in insurance

From policy issuance, claims settlement, and even premium payments, smart contracts can automate all insurance processes with the help of blockchain technology. 

This is because they are self-executing, meaning they perform a task, like releasing insurer’s funds for a claim settlement, upon satisfaction of a pre-coded condition, like approval of a claim upon evaluation.

Smart contracts are coded on a distributed ledger system like Ethereum, making it possible for anyone to verify the transaction. How? The record of all transactions is replicated in full on each participant’s computer. This makes them highly transparent, as everyone has a complete, traceable record of every transaction recorded on the blockchain.

Insurance can benefit from smart contracts through:

 1. Automated claims

Smart contracts streamline the claims process by automating it based on predefined conditions. For example, in homeowner’s insurance, if an earthquake occurs, the smart contract can trigger the claims process without manual intervention. It verifies coverage, assesses damage, and can even facilitate claims settlement.

 2. Enhanced risk assessment

Smart contracts, with the help of blockchain, predictive analysis and IoT devices, can greatly improve the process of identifying potential risks posed by prospective customers. 

Some health insurance programs today utilize smart contracts to monitor policyholders’ real-time health data from wearable devices. If certain health metrics indicate an increased risk, the smart contract can adjust the premium accordingly or trigger preventive measures such as health counseling or lifestyle recommendations.

 3. Streamlined policy administration

Smart contracts can automate various aspects of policy administration such as issuance, renewal and modification. For example, when a customer purchases an insurance policy, a smart contract can automatically generate the policy document, record the transaction on the blockchain and initiate premium payments. 

Similarly, at the time of renewal, the smart contract can assess the policyholder’s claims history and adjust the premium accordingly.

 4. Better customer experience

By leveraging smart contracts, customers’ experience can be greatly enhanced, offering transparency, efficiency, and convenience. Clients can easily access their policy details and track claims status in real-time through a user-friendly interface. 

Furthermore, automated processes enabled by smart contracts ensure faster response times and resolutions, ultimately leading to increased customer satisfaction and loyalty.

Beyond the proof of concept

The implementation of smart contracts in the insurance industry is gaining momentum. With the potential to revolutionize traditional insurance practices, smart contracts represent a significant step forward in modernizing the industry.

Chainlink Labs

ChainLink enables blockchain-based parametric insurance applications to access real-world data, automating claims processing and reducing operational expenses. In instances like severe weather events, Chainlink retrieves pertinent weather data to validate and automate compensation disbursements through an insurance provider’s smart contract.

Lemonade

Last year, 7000 Kenyan farmers received insurance payouts via the Lemonade Crypto Climate Coalition. Smart contracts on the blockchain were created upon enrollment in the parametric crop insurance program. At season end, yield data transmitted to smart contracts triggered instant payouts for crop failures due to adverse weather conditions. This has expedited claim settlements, eliminating the need for filing or human adjusters, thus reducing costs and processing times.

Insurwave

Insurwave is the world’s first blockchain solution for marine insurance, utilizing the Corda Blockchain. It connects clients, brokers, insurers and third parties via distributed ledgers, storing comprehensive data on identities, risks, and exposures. Seamlessly integrated with insurance contracts, Insurwave facilitates asset data management, links data to policy contracts, enables real-time processing of pricing and business changes, and validates up-to-date loss data notifications.

Bottom line

Smart contracts have revolutionized the insurance industry, transforming slow claims processing and lack of transparency in insurance into streamlined, automated operations. This transformation is exemplified by bold initiatives from major firms like Lemonade and IBM.

However, as with any emerging technology, it’s crucial to ensure that the benefits outweigh the drawbacks. Proper utilization of smart contracts requires smart and proper investment in understanding the underlying technology, namely Blockchain. In addition, thorough market research is essential to gauge readiness and reception.

April 10, 2024
Automation Featured General Insurance

Location intelligence and aerial imagery are relatively new ideas, but they are already proven to be very useful in helping insurers better understand what their customers need.

This technology uses geospatial information to give a more accurate picture of danger, going beyond simple zip code data. For example, real-time level data can help insurers figure out how likely it is that a property will flood or find infrastructure that has been updated or damaged. Putting together geospatial data with advanced analytics makes it easier for insurers to do their jobs by combining better underwriting and claims handling into a single framework.

Besides these improvements, new technologies offer something more to help insurance than just analyzing data. They allow consumers to get personalized safety advice, see changing claims visualizations, and keep an eye on risks all the time. It works out well for everyone: customers get better security and lower premiums, and insurers learn more about how their business works.

Property & casualty division

The P&C industry is about to go through a big change. Due to inflation, rising labor costs, staff shortages, and bad weather, premiums around the world are expected to rise to $10 trillion by 2030. Because of this upcoming financial milestone, insurers are putting money into new technologies like location intelligence to help them write more accurate plans. This method uses location data and pictures taken from above to see things that the human eye can’t. This gives us a complete and more correct picture of property risk, and it also encourages insurance companies to correctly price and quote property risks, which sets them up for success right from the start.

With location intelligence, insurers can control risk ahead of time to find properties that are likely to be damaged by natural disasters, crime hotspots, and other dangers. Think about flames as an example. For example, the defensible area around a property, the materials used on its roof, or the distance between buildings are all things that help insurers figure out how much risk a property is exposed to. When they have these exact insights, they can change policies, set prices and rates more accurately, and maybe even lower losses or stop them from happening. Ultimately, giving insurance accurate risk assessments leads to better customer service, more efficient operations, and higher profits in the future. More importantly, though, it becomes important for building a strong future.

Enhancing efficiency in underwriting & claims procedures

Underwriters can make sure they don’t miss any important areas by using specific location intelligence and checking to see if secondary structures change the risk criteria. Using geospatial data and aerial imagery together in this way speeds up the screening and claims management processes that are usually very slow. When underwriters learn about property risk, they learn about things like flood zones and how vulnerable the property is to bad weather like hurricanes, wildfires, and tropical storms. For example, when insurers use location intelligence, they don’t have to rely on old images and bad data to reevaluate the risk of flooding in coastal areas. After that, they can change the prices of their policies by combining current images, elevation data, and old storm records.

Also, this makes insurers work on loss control more effectively, making it an important part of the lifecycle of an insurance policy. When it’s time to renew, location intelligence can give insurance up-to-date information on properties, which makes it easy to spot any new risks. Innovative AI systems can find all of these new risks by pointing out things like property repairs, roof and property damage, and any additions or secondary buildings to properties.

Location intelligence is a very useful tool for adjusters who deal with claims. Location data can be used by adjusters to check details about an incident, like where a property is located, what features the land has, or how the weather behaves during a weather event. Insurance companies can easily compare pictures taken before and after a disaster to figure out how much damage was done and send help to the places that need it the most. This speeds up investigations, gets rid of pointless delays, and helps agreements be finalized faster in the end. It also adds a new level of openness and provides objective proof during the claims process, which is good for both the insurance and the insured.

Revolutionary technologies transforming the insurance industry & policy management

At the center of change in the insurance business are machine learning (ML) algorithms and generative AI. What do these tools have to do with location intelligence, though? One thing is that these algorithms can now quickly and accurately look at huge geospatial location records to predict possible risks. This feature makes it easier for location intelligence to make predictions. Location intelligence uses machine learning and generative AI to give real-time information about important property features like debris, roof state, and roof age.

Moving beyond traditional “one-size-fits-all” models, this process lets insurers make policies that change based on each person’s wants and habits. Moving from risk assessment to claim handling, for example, large language models (LLM) can speed up the claims process by automating the tedious tasks that come with it. A LLM can go through a portfolio and automatically take out data, which can then be put together into a full risk assessment. Because it handles administrative chores, speeds up document analysis, and makes communication with policyholders better, this automation lets insurers focus on the more strategic parts of their work. In addition, this automation increases the trust and accuracy of insurers throughout the whole lifecycle of a policy.

Nearly a trillion devices will be connected by 2025, according to experts. These technological advances are not only bringing the industry up to date; they are also changing what insurance means in a fundamental way. A change is happening from “repair and replace” to “predict and prevent” for more personalized risk management. These tech-based innovations can make insurance more useful, easier to get, and better for everyone.

There is no doubt that location intelligence is a powerful force that is shaking up the insurance business. When insurers use geographic data and advanced analytics, they not only improve their financial health, but they also make key processes run more smoothly and set a new standard for proactive, data-driven industry practices. As location intelligence and the technologies that go with it keep getting better, the insurance business will be more flexible, data-driven, and proactive in the future.

April 8, 2024
Automation Featured General Insurance

Change is nothing new to property and casualty insurance. The sector has demonstrated remarkable adaptability over the past ten years to new and developing risks, including the gig economy, the intricate web of cyberthreats, and the increasing intensity and frequency of catastrophic weather events. And right now, the rapid development of AI is causing yet another seismic shift in the P&C insurance industry.

With three major effects already apparent, artificial intelligence (AI) is rapidly becoming a formidable tool for conventional insurance models. These effects include changing the dynamics of P&C insurance sales and market expansion, redefining risk management criteria, and drastically reducing operating costs. This transformation will impact insurance in ways we’re only now starting to realize, ushering in a period of never-before-seen efficiency, accuracy, and expansion. Here’s a closer look at how AI is transforming the P&C insurance industry—not only making small adjustments, but also bringing about a fundamental shift.

1. Increasing sales

Insurance sales are being reengineered by AI, which gives insurers access to hitherto untapped areas. Products are being tailored to meet a variety of needs by using advanced analytics and predictive modeling to uncover new client segments. By reaching more individuals and providing them with exactly what they need, this expansion aims to increase consumer happiness and engagement.

Another field in which AI excels is the creation of more complex and customized products. Insurance providers can provide customized insurance plans that address the unique requirements of individuals or companies by utilizing large databases. Artificial Intelligence (AI) is a valuable tool for producing more appealing and competitive insurance products because achieving this level of customization requires time-consuming traditional approaches.

2. Enhancing risk management

Artificial Intelligence has a significant impact on risk management. Improved algorithms yield more precise pricing models, guaranteeing that premiums accurately represent the risk. This precision guarantees consumer justice and boosts insurers’ bottom lines, resulting in a more equitable insurance market.

AI also plays a key role in decreasing claim losses and enhancing risk selection. Artificial intelligence (AI) systems are more capable than ever of identifying possible high-risk instances by examining patterns and trends from enormous volumes of data. By reducing losses and facilitating a more effective use of resources, this capacity makes sure that attention is directed where it is most required.

3. Decreasing expenses

Reducing operational costs is one of the ways AI is likely to directly affect conventional insurance arrangements. All activities, including customer support, underwriting, and claims processing, are becoming more efficient thanks to AI-driven automation. Because of this automation, less manual intervention is required, which lowers labor costs and improves operational efficiency.

One cannot emphasize how much AI has increased productivity. We may now finish tasks in minutes that used to take hours or days. Being efficient is being able to handle more work without making as many mistakes as before. It’s not simply about speed. AI is changing the game with its fast and accurate processing and analysis of huge datasets.

What is your organization’s strategy for AI implementation?

There’s no denying AI’s capacity to transform and improve conventional insurance models; it can open new markets, redefine risk management tactics, and save a ton of money on overhead. Customers’ expectations are also being redefined because of this transformation, in addition to industry norms.

AI is going to play a more important role in P&C insurance as time goes on, moving from a competitive advantage to a necessary tool for every insurer trying to stay relevant in the market. AI in insurance is now a reality, not just a theoretical future. It has come about quite quickly. By using this technology, insurers may put themselves at the forefront of a sector that is known for increased customer focus, accuracy, and efficiency. There’s no mistaking the message: artificial intelligence is rewriting the rules, not just altering the game.

March 7, 2024
Automation Featured General Insurance

Robotic Process Automation (RPA) has emerged as a game-changing technology across various industries, including insurance. RPA is the use of low-code software bots to automate repetitive and rule-based tasks within business processes.

These bots are adept at mimicking human actions and seamlessly interact with different systems and applications to execute tasks like data entry and validation.

Studies indicate that financial services have experienced a potential ROI increase of up to 200% during the initial year following RPA implementation. In the insurance sector, RPA has garnered significant attention and adoption due to its capacity to streamline operations, enhance efficiency and drive cost reductions.

Insurers handle large volumes of customer data for a number of business processes ranging from underwriting, claims processing, sales and distribution, policy administration and even regulatory compliance.

By automating laborious and error-prone tasks, RPA empowers insurance companies to redirect their focus towards value-driven activities instead like decision-making and personalized customer service.

How insurers benefit from RPA

Policy administration

The manual underwriting process in insurance, historically time-consuming and labor-intensive, has been transformed by Robotic Process Automation (RPA).

RPA paired with OCR (Optical Character Recognition) will enable insurers to automatically digitize customer data from registration forms and other printouts. Afterwards, integration with Advanced Analytics and Machine Learning models will bring out useful data insights.

Automating administrative activities like rating and quoting with RPA saves time and resources, enhancing workflow efficiency in the insurance industry. Real-life case studies —covered in the next section—demonstrate significant reductions in time and effort, enabling quicker and more effective processing of applications.

Furthermore, RPA assists in policy renewals by automating communication, updates and premium collection, while also managing policy cancellations efficiently.

Customer service

Insurance companies are leveraging Robotic Process Automation (RPA) to transform customer service operations. By integrating conversational AI and RPA technologies, insurers expedite issue resolution and empower support teams with AI-driven assistants.

These assistants efficiently process unstructured data, generate customer profiles, and provide timely solutions, enhancing overall customer service effectiveness and satisfaction.

As customer expectations evolve towards personalized service, RPA tools play a crucial role in automating standardized and time-consuming tasks. This allows employees to focus on providing personalized interactions for complex grievances.

Case studies

PZU

As one of Europe’s leading insurers, PZU Group harnessed UiPath’s RPA technology to improve customer service. By deploying RPA in its five critical applications, PZU realized a 50% boost in insurance consultants’ productivity. This efficiency enhancement significantly reduced call durations with customers while ensuring 100% accuracy in data entry.

Zurich Insurance Group

Zurich Insurance Group optimized its policy handling processes with Capgemini’s automation solution powered by BluePrism software. Integrating RPA robots early in policy management streamlined tasks like data entry, invoice generation and policy document drafting. This resulted in improved policy quality and a notable reduction in support desk inquiries.

Nsure.com

Nsure.com, an online insurance shopping platform, implemented RPA to automate customer communications. This initiative has transformed their sales and distribution, allowing half of their customers to complete transactions without agent interaction.

ADNIC

Abu Dhabi-based insurance provider, ADNIC, achieved a 30% reduction in work time by implementing RPA bots for quote generation and policy registration. This efficiency gain enabled employees to transition into decision-making roles, enhancing overall operational effectiveness.

Bottom line

Many employers overlook the inefficiency of manual tasks. McKinsey reports that workers spend 1.8 hours daily on non-impactful activities like data gathering and aggregation alone. By automating repetitive tasks and streamlining processes, insurance providers can realize significant cost savings and operational efficiencies.

Reach out to LenderDock today to learn more about how our solutions empower your business and drive success in an ever-competitive market landscape.

February 29, 2024
Automation Business Featured General Insurance

In the realm of insurance, the concept of Uberrimae Fidae, or Utmost Good Faith, serves as the bedrock of trust and transparency between insurers and policyholders. This principle mandates complete honesty, full disclosure of pertinent information, and unwavering transparency throughout the insurance process.

Essentially, it establishes a framework for mutually beneficial relationships and fair dealings.

However, with the proliferation of customer data, rising incentives for fraud, and increasing market competition, insurers face the challenge of maintaining customer trust while remaining competitive.

This is where blockchain comes into play.

What is blockchain?

Blockchain is a decentralized ledger technology that facilitates secure and transparent recording of transactions across a network of nodes. Each transaction, encapsulated within a “block” is cryptographically linked to its predecessor, forming an immutable chain resistant to retroactive alteration.

This architecture ensures the integrity and transparency of data stored on the blockchain.

While the term has often been associated with cryptocurrencies, this represents only the tip of the iceberg in terms of its potential.

Blockchain in insurance

The integration of blockchain technology into the insurance sector holds immense promise for revolutionizing traditional processes and enhancing operational efficiency. By harnessing blockchain, insurers can streamline various facets of their operations, from policy issuance and claims processing to risk assessment and fraud detection.

The distributed ledger nature of blockchain allows insurers to store immutable and traceable records of customer data, accessible in real-time by various stakeholders.

Additionally, smart contracts enable automation of insurance processes like claim payout, triggering payments automatically when predefined conditions are met. For example, if premiums have been duly paid, and the specified peril conditions have been met, the claim will be paid out automatically.

Applications of blockchain

  • Smart contracts

Smart contracts, imbued with self-executing capabilities and predefined conditions, automate various insurance processes. This includes policy issuance, claims settlement, and premium payments, based on predetermined criteria.

Smart contracts can be implemented on the blockchain and thus allow for a self-serving mechanism requiring little to no supervision.

  • On-demand insurance

Leveraging blockchain, on-demand insurance models offer flexible coverage options that policyholders can activate or deactivate as needed, catering to evolving customer needs and providing personalized insurance solutions.

Take for instance motor coverage that is activated only when the insured alone actively drives his vehicle. Telematic data can be fed in real time into the blockchain allowing for dynamic adjustments to premiums based on usage.

  • Re-insurance

Blockchain facilitates transparent and efficient reinsurance processes by enabling real-time data sharing among insurers and reinsurers. This enhances risk assessment, claims handling, and settlement procedures, resulting in cost savings and operational efficiencies.

  • Health insurance

Blockchain enhances data sharing and management in health insurance by securely storing and accessing medical records. Real-time access to patient records by both healthcare providers and insurers speeds up claims processing and prevents fraud by ensuring data integrity.

  • Legal compliance

Blockchain aids insurers in meeting legal and regulatory obligations by securely storing and sharing customer data for KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance. Moreover, it automates the generation and submission of insurance reports to regulators, ensuring timely reporting.

Final thoughts

The essence of the insurance business lies in trust between key stakeholders. Blockchain enhances this trust by securely storing data, automating processes and reducing risks (fraud).

Ready to streamline your insurance processes and focus exclusively on serving your policyholders? Discover how LenderDock’s innovative Verification-as-a-Service platform can revolutionize your operations and drive cost savings. Embrace the future of insurance today with LenderDock.

February 21, 2024
Automation Featured General

As we look ahead to 2024, here is a quick recap of our experience at ITC Vegas 2023.

ITC 2023 in Las Vegas marked a distinct shift in networking dynamics, offering a unique blend of interactions with existing clients, partners, and newfound connections. While familiar technologies and solution providers were present, the influx of new companies and partners signaled the ongoing evolution and innovation within our industry. Here are key highlights from our three-day immersion:

Automation takes center stage

Throughout the event, the resounding theme was automation. Speakers, breakout sessions, and discussions emphasized the imperative to automate tasks and process management across the insurance industry. Technological advancements are enabling increased efficiency, error mitigation, and enhanced customer service. Carriers and providers are fervently pursuing strategies to “do more with less” by streamlining clunky manual workflows.

Modernization imperative

A significant portion of the insurance marketplace appears hesitant to embrace the rapid technological advancements, such as AI, Blockchain, and cloud digitization. Some are adopting a “wait and see” approach, while others cite financial constraints as a barrier to investing in a modern tech stack. Thought leaders unanimously emphasized the urgency to modernize, cautioning against waiting, as customer expectations are evolving rapidly. Within the next five years, failure to deliver a unique and differentiated experience may render companies obsolete.

The rise of AI

AI emerged as the dominant buzzword, featuring prominently in over half of the presentations and discussions. Despite its conceptual integration into various aspects of the insurance business, including underwriting, claims processing, customer service, and risk assessment, there is consensus that widespread adoption will require substantial development, modeling, and regulatory considerations. The prevailing sentiment is that the journey to adopt AI will be more prolonged than initial expectations suggest.

January 29, 2024
Automation Featured General Insurance

Data is nothing new to the insurance sector. Underwriters and actuaries have been assessing risk and setting prices by analyzing large volumes of data for decades. But as the insurance market develops, artificial intelligence (AI) will play a bigger role in assisting insurers in remaining competitive and meeting changing client demands. Even more opportunities have arisen due to the generative AI models’ recent surge in popularity, such as OpenAI’s ChatGPT. In the following is a high-level summary of the typical insurtech effect areas, highlighting three particular businesses whose products make extensive use of AI.

Emergence of insurtech in the spotlight

Innovations in insurance firms and products that are based on technology have increased rapidly during the last five years. All these developments are referred to as insurtech. By utilizing technological breakthroughs, especially artificial intelligence (AI), insurtech is revolutionizing the traditional insurance industry. They employ AI to improve client satisfaction, optimize workflows, and deliver more individualized services. The following functional domains have been the focus of several of these technologies:

• Enhanced underwriting procedures

• Streamlined claims processing

• Increased policy flexibility and customization

• Preventing fraud

• Enhanced risk management

The insurance sector is adjusting to the world’s constant digitization. This tendency will only continue as more businesses invest in it, as we’ll cover in the sections that follow. It’s fascinating to keep an eye out for developments there.

Kin

Chicago-based Kin is a cutting-edge home insurance provider. The company was established in 2016 with the goal of giving consumers purchasing house insurance a more customized experience. Their platform offers well-informed advice on what insurance coverage is best for each property. Kin analyzes a comprehensive data set comprising over 5,000 factors about each customer and their home before making recommendations. A human underwriter could never match the speed and precision of the quotes generated by Kin’s platform. All of this is made feasible by Kin’s usage of artificial intelligence.

Standard home insurance policies frequently have the flaw of being inflexible, meaning they don’t alter when the cost of materials and houses does. A scenario where the coverage is insufficient to cover the cost of replacement can easily result in underinsurance. This issue is resolved by Kin’s platform, which uses market data and periodic reevaluations of underwritten policies to identify potential issues.

Kin can run a lot leaner as a business, with considerably lower expenses, because it can use its software to optimize many elements of the firm. As a result, Kin can pass along the cost savings to its clients, increasing their competition in the industry.

Clearcover

An auto insurance provider called Clearcover takes great satisfaction in using cutting-edge technology to give its clients the finest possible service. Their exclusive ClearAI AI-based tool forms the basis of their technology. Throughout the company, Clearcover makes extensive use of this tool. In terms of quotation, Clearcover’s platform assists clients in obtaining the appropriate coverage according to their particular needs, much as Kin’s. The capacity of Clearcover to handle claims, however, is where the more amazing functionality resides.

The sophisticated image processing feature of ClearAI enables it to instantly assess if an incident is covered by analyzing photos of a damaged car. The customer might receive an automatic payout from the platform once ClearAI verifies their eligibility. Clearcover may now pay a valid claim in as little as seven minutes after it has been fully processed thanks to these features. However, processing a claim with an insurance company usually takes days.

As an insurance firm, Clearcover gains a great deal from company representatives who are successful in selling their policies. Considering this, they have expanded ClearAI to incorporate lead qualification tools. With so many leads to review, there is a lot of noise. These tools assist agents in sorting through it. They can immediately obtain better-quality leads and have a greater likelihood of client retention.

DAIS

In the InsurTech space, DAIS Technology is finally making waves with UnderwriteGPT, a new product built on generative AI and large language models. No insurance is sold by DAIS. The business created a set of resources that insurance firms can utilize. Their product offers may be enhanced, goods can be introduced to the market faster, and customers will receive an overall better experience thanks to this suite.

Kin and Clearcover notwithstanding, DAIS intends to promote UnderwriteGPT as a mechanism to expedite the underwriting procedure and enhance risk evaluation, culminating in superior policyholder coverage and price. DAIS and The Paladin Group, a top digital brokerage with a focus on transportation and cutting-edge risk management solutions, collaborated to create UnderwriteGPT. Because UnderwriteGPT is still in the early stages of becoming ready for the market, the company has only provided limited information on what it does explicitly.

UnderwriteGPT has been in confidential development for approximately a year, and its public unveiling marks a significant milestone. The solution is expected to revolutionize the way brokerages and insurance companies approach policy underwriting.

Insurtech’s evolution: Navigating tomorrow’s landscape

The insurance industry has seen tremendous transformation in recent years due to the introduction of contemporary technology. Businesses like DAIS Technology, Kin, and Clearcover have been setting the standard for using AI to transform the sector. With technology developing at a never-before-seen rate, the opportunities for creativity are endless. Leaders in the sector aren’t scared to think outside the box, from wearable technology that analyzes health data and modifies premiums accordingly to AI-powered customer support. There are a lot more insurtech innovations to come that will benefit both insurance firms and policyholders.

January 24, 2024
Automation Business Featured General

Think again if you believed that the digital nomad was just a passing fad that would soon fade away. 69% of digital nomads said they intended to maintain their way of life for at least the next two to three years in 2022. This is an increase from 54% in 2021 and 49% in 2020, and the rate is just going up.

Employers understand. With ongoing shortages of competent people, work-from-anywhere employment policies are gradually becoming a mainstream strategy. Companies in talent-shortage hot regions are rated highest in the world when it comes to remote and flexible working arrangements, according to a new analysis based on 50,000 global remote job offers.

To realize this new reality, the legacy insurance market still has some catching up to do; most still price mid-term policies as though digital nomads are high-risk drifters. The truth is that these shifting trends have given rise to a brand-new, multi-billion-dollar insurtech potential for the increasing number of digital platforms that are now available to meet the demands of this industry.

The emergence of digital nomad platforms

An estimated 35 million people work remotely as digital nomads, adding $787 billion to the global economy each year. With services in travel, employment, community, and education, the market for platforms serving this economy is huge and expanding quickly.

The effect of the digital nomad way of life on trends in home leasing alone is intriguing from this mix of possibilities. The acceptance of temporary and intermediate agreements is growing in society. A few of the services that are offered alongside Airbnb are those from Housinganywhere, Anyplace, Flatio, Nomad Stays, and Selina. Even platforms that will plan your entire vacation for you exist, such as NomadPass and BoundlessLife.

These platforms now have the option of providing insurance policies that are tailored to the requirements of the nomadic lifestyle in short-term rentals thanks to the quickness and ease of embedded APIs from insurtechs. In this area,  five immediate opportunities have been identified:

Exploring five insurtech avenues tailored for the needs of digital nomads

1. Deposit-free rental insurance

Digital nomads who may only wish to stay for a few months or who are less likely to have the money to fulfill these high demands every time they relocate may be put off by the traditional three-month upfront deposit.

With a level of protection significantly greater than the conventional cash deposit or rent guarantee, rental insurance is a creative method to do away with deposits. It might also be simpler to maintain. Insurtechs can do this through a digital method that enables landlords to provide this option to applicants so they can rent out their houses more rapidly.

2. Coverage for your assets: Property insurance

Renting homes for months at a time is common for digital nomads, who typically stay in them for longer periods than regular visitors. Due to the trend of mid-term rentals, nomads may have greater duty and accountability for the upkeep and quality of the properties they occupy. Furthermore, they are probably storing more expensive personal items at the rental home.

Digital nomads require property insurance that is more suitable for their circumstances because typical tourist plans do not cover these situations. From the standpoint of a landlord, digital nomads can provide new dangers or obligations, such as the possibility of wear and tear from constant use or migration to the building and its belongings.

3. Safeguarding your earnings

The income of digital nomads can be unexpected and unstable because they frequently work as independent contractors or manage their own enterprises. This group may find great appeal in an insurance plan that offers a safety net in the event of contract or income loss.

This product could provide adjustable premiums like pay-as-you-go rates based on real earnings or project-based premiums related to certain contracts to accommodate variable income streams. These methods can make it possible for digital nomads to match their insurance costs with their income, making insurance more affordable and guaranteeing they are adequately covered both during successful and difficult times.

4. Securing remote work environments

This would include any occurrences like equipment theft or damage, cyberattacks, or data loss that could limit a digital nomad’s capacity to work remotely. Additionally, it can include paying for unforeseen expenses that might arise, such as quickly securing new employment.

It is advisable to provide covering for costs associated with moving to a new workspace, such as temporary co-working space rents, internet access options, or travel costs. Insurance plans can give digital nomads peace of mind and financial security in the event of unanticipated setbacks by providing thorough coverage for both the logistical and physical components of remote employment.

5. Insurance for cancellations

A host who provides insurance to cover cancellations or short trips is preferred by many guests. The benefits accrue to both parties: guests gain the certainty that they won’t be charged if their plans change, while hosts get to see some cash if their guests change their minds.

Platforms may provide visitors with cancellation and interruption insurance as an add-on service even if hosts do not include it in their offering. In my experience, nomads have a natural desire to move around and may try to extend or shorten their stays as necessary.

With their ability to leverage AI and data analytics, insurtechs may potentially have an inherent edge in any situation. In several businesses, affiliate partnership programs now make up a sizable portion of what is being offered as additional services. Additionally, embedded APIs have made it quick and easy. There is still room for growth in the mid-term insurance market for digital nomads, where specialized platforms may provide customers additional service advantages.

October 4, 2023
Automation Featured General Insurance

Digital transformation has improved procedures from quotation through coverage administration in the property and casualty insurance industry. With an omnichannel approach to customer service and other aspects of business, this digital revolution is accelerating as we look ahead to 2024.

In fact, in order to maintain their competitiveness, insurers of all sizes are using adaptable, sustainable solutions. These five cutting-edge technological trends, which we’ll discuss in Part One, are now strategic necessities for insurers that want to get the upper hand.

1. Anticipatory Data Analysis

Predictive analytics is widely used by insurers to acquire a variety of data for client behavior analysis and forecasting. There are new uses for it, though, which can improve the accuracy of the data.

In 2023 and 2024, insurance companies can use predictive analytics for:

  • Risk selection and pricing
  • Recognizing customers who might cancel
  • Identifying fraud risk
  • Classifying claims
  • Detecting erroneous claims
  • Recognizing trends

Numerous Property and Casualty insurance companies have seen increased accuracy and increased revenue after adopting predictive modeling methodologies. According to research done by McKinsey & Company in 2023, the top four performers in EMEA in 2022 had an operating profit increase of 10–25% because of the use of predictive analytics.

Additionally, it is anticipated that this influence would increase during the next two years. It’s important to note that numerous businesses believe predictive analytics will increase their operating earnings by over 25%.

2. Artificial Intelligence (AI)

Artificial intelligence (AI) is becoming widely used, and there are now many AI-capable devices in households all over the world. The use of voice assistant technology in the United States is anticipated to grow steadily over the coming years, according to a Statista estimate. By 2026, it’s expected that the 142 million people who signed up in 2022 will have increased to more than 157 million members. So how can the insurance sector take advantage of this pervasive and available technology?

Customers are particularly on the hunt for tailored experiences when purchasing something as important as P&C insurance. AI allows insurers the ability to create these unique experiences so they can meet the quick-paced demands of modern customers. The key lies in harnessing AI’s abilities to leverage the enormous amounts of consumer data that are already available to create personalized experiences based on a person’s behavior and habits.

In addition, insurers can use AI to speed up the underwriting process and reduce the time it takes to process claims. Additionally, AI helps insurers to access data more quickly, and doing away with human intervention may result in faster, more accurate reporting.

According to a McKinsey & Company analysis, AI might transform the insurance sector by moving it from a “detect and repair” approach to one of “predict and prevent,” which would alter how brokers, customers, and other stakeholders operate. The outcome? enhanced customer experience, better decision-making, increased productivity, and cost savings.

3. Training Machines to Learn

The incorporation of machine learning operations will determine the insurance technology trends of 2023. To maximize the benefits of data-driven analytical tactics, this will require cross-departmental cooperation. The deployment and administration of machine learning (ML) requires a number of different processes and practices, according to Deloitte Insights. The potential of AI may be difficult for organizations to realize without adequate MLOps skills.

Not only can machine learning make claims processing better, but it can also be automated. Digital files that are accessed via the cloud can be examined using pre-programmed algorithms, enhancing processing efficiency. This automated evaluation can affect more than just claims; it can also be applied to risk analysis and policy management.

You don’t want to fall behind when it comes to embracing machine learning skills. All indications are that machine learning will spread throughout the insurance industry. According to a SMA poll, 66% of P&C insurance executives think machine learning will have a significant influence on commercial lines of business while 53% of executives think it would have a significant impact on personal lines.

4. Connecting the World: The Internet of Things (IoT)

The Internet of Things (IoT) can automate much of this data sharing because most consumers are eager to contribute extra personal information if it means getting a better deal on their insurance coverage. When calculating rates, reducing risk, and perhaps preventing losses altogether, insurers can leverage data from Internet of Things (IoT) devices like the numerous smart home components, car sensors, and wearable technology.

P&C insurers simply cannot afford to wait to take use of IoT capabilities, as predictions indicate that the market for IoT insurance will grow to be quite large by 2029. IoT will support other insurance technologies with first-hand data, increasing the accuracy of risk assessment, allowing insureds more power to directly affect the pricing of their policies, and offering insurers the potential to increase accuracy and revenues.

5. The Intersection of Insurance and Technology

The insurtech industry, or more precisely insurtech businesses, makes use of the most recent insurance technologies to save costs for both consumers and insurers, boost operational effectiveness, and enhance the entire customer experience. Insurtech advances the capabilities of existing digital insurance services, which may sound similar to those that have been in use for some time.

The third quarter of 2022 will see the first growth in P&C insurtech funding since the second quarter of 2021, according to a report by Gallagher Re. Over 75% of the entire insurtech investment for Q3 2022 came from the $1.8 billion in funding, which represented a growth of 20% quarter over quarter.

Since 2012, the insurtech market has brought in over $50 billion, reaching its peak in 2021 before tumbling in 2022. The financing split favors P&C insurtechs over their peers in the life, accident, and health sectors by a 60-40 margin.

Look for more ways that technology trends are changing the insurance industry in 2023 beyond in Part Two, coming soon.

August 30, 2023
Automation Business Featured General

LenderDock is pleased to announce the availability of its Simple Verifi™ API service which enables mortgage banks, loan originators and other financial third parties to efficiently and cost effectively verify basic P&C insurance policy-related details both in bulk and in real-time. Lienholders and mortgagees can now leverage the Simple Verifi™ API in order to eliminate the thousands of outbound phone calls, emails and paper mail that are generally required to validate the data on an unlimited number of home, auto and commercial insurance policies.

LenderDock has also developed an enhanced version of the API service called HOI Connex™ which expands on the available verifiable information that is needed. This enables any bank or financial institution the ability to validate a broadened and compliant data set within the policy through an on-demand generation of standard evidence of insurance certificates.

“These new web-services will have an increased and dramatic impact on both the banking and P&C insurance provider communities by supporting an all-digital commitment most have to prioritizing lienholder communication, processes and workflows,” said Frank Eubank, LenderDock’s CEO.

About LenderDock

Headquartered in Salt Lake City, Utah, LenderDock is the leading provider of online Property and Casualty Insurance policy verification and automated lien holder management services. The SaaS platform offers banks, lenders and all financial third parties the ability to electronically verify, manage and update policy-related data in real-time.

August 2, 2023
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