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The intersection of technology and customer experience is where the evolution of digital transformation in insurance can be found.

The insurance industry for property and casualty is being changed by digital technology. The use of technologies such as telematics, the sharing economy, big data, digital communication platforms, and competition are leading companies to focus less on their products and processes, and more on customizing the customer experience.

Insurance consumers now have different expectations and usage patterns than they did before. Property and casualty insurance companies should be prepared to use technology and implement a thorough customer strategy when engaging with policyholders.

Providing a top-notch experience has become challenging due to the “Amazon effect,” where consumers expect excellence from every industry. Additionally, insurance needs have changed, with young adults delaying home purchases and driving less. Members demand tailored products and services to suit their lifestyles and are willing to explore non-traditional brands to fulfill these requirements.

The use of technology and data insights presents a chance to personalize the customer experience instead of just concentrating on products. Various technological advancements such as telematics, mobile apps, drones, and self-service are positively affecting different aspects of the industry such as products, claims, services, and pricing. Additionally, the emerging “insurtech” industry has received over $1 billion in funding, as per CB Insights.

P&C insurers have the chance to become more strategic in their interactions with members and operations, thanks to these trends. By doing so, they can decrease expenses and risks and enhance customer relationships.

As P&C executives, you may be interested in four insurance technology trends that focus on improving customer experience through technology. The trends mentioned are expanding next-generation products, incorporating telematics, offering usage-based insurance, and utilizing chatbots.

1. Evolution of consumer needs unveils a vast array of product possibilities

A decade ago, the insurance industry did not have many of the new products available today. Examples of these new products include identity theft protection, extensions to property insurance, car insurance specifically designed for ride-sharing passengers, and self-service apps that aim to make insurance services more efficient.

Executives in the industry should avoid jumping on the tech bandwagon to shed their laggard reputation unless there is a significant customer need. Instead, they should focus on rethinking products and using data to enhance existing products and services based on actual customer needs. Simply using cool technology is not a sufficient reason to make changes. Instead of completely changing things, sometimes just making small, personalized changes can be enough. It’s important to be accessible to members through their preferred channels, such as mobile devices, especially for those who think about products and services while on the go.

2. Achieving personalization on a large scale with telematics

Telematics involves gathering diagnostic data from a device and sending it to your insurance company. This information helps the company gain customer insights and create digital insurance strategies that can increase revenue, reduce costs, and build stronger and more profitable relationships with customers.

The potential to be revolutionary and more people are starting to use it. However, there are concerns about privacy. Our research indicates that companies can increase adoption and gain a competitive edge by prioritizing the needs of their customers when implementing the program.

Telematics systems promote safe driving practices that lead to fewer accidents, resulting in lower insurance claim payouts and improved profitability for insurance companies. A report by Cisco Internet Business Solutions Group found that vehicle connectivity can generate savings of up to 80% in claims and cost management. As insurers continue to study driving habits, they will gain additional insights that will benefit underwriting and claims, as well as sales and retention.

Insurers can save costs and respond to claims faster with technology like advanced crash notification. This provides early notice of loss and real-time accident data, allowing for more precise and efficient claims settlements, fraud detection, emergency response, and assistance such as tow, rentals, and repairs.

Telematics in homes can be used to connect with in-home video cameras to create digital inventories of the home’s contents. This helps to speed up the process of filing claims and makes it simpler to recover losses. Insurers can also analyze energy consumption data and usage patterns with utility partnerships to improve their pricing strategies for liability or dwelling coverage.

3. Surge in popularity of usage-based insurance pricing

The traditional insurance industry has relied on general data, such as demographics and geography, to determine underwriting and risk assessments. However, Usage-Based Insurance (UBI) changes this approach by using telematics to assess individual usage and adjust premiums and policies accordingly.

According to the National Association of Insurance Commissioners, within three years, approximately 20% of all vehicles insured in the U.S. are expected to be covered by usage-based insurance policies. This trend is advantageous for both insurers and policyholders.

As insurance companies offer usage-based insurance (UBI), there are opportunities for improving customer experience. Despite awareness of UBI growing from 39% to 43% since 2015, companies that focus solely on promoting its use for cheaper premiums may not attract customers who are not motivated by discounts. Furthermore, even though half of the consumers who are offered UBI enroll, only 20% of them report being made aware of this option in the first place.

It is important to mention that customers are holding off on signing up until they have access to unbiased feedback. A recent survey revealed that 56 percent of respondents would not participate in a UBI program without reviews or feedback, and 40 percent stated that they would only enroll if someone they know has already joined.

Lastly, UBI is commonly considered a viable option for younger individuals, and for a good reason. According to Towers Watson, 72 percent of Millennials think it’s an effective method to determine auto insurance rates. Nevertheless, people aged between 45 and 64 are showing a rising interest in UBI as well.

4. Expanding presence of Property & Casualty chatbots

The use of chatbots is increasing, and the property and casualty insurance industry is still figuring out the best ways to utilize this new technology. Chatbots are automated conversations conducted through messaging apps such as Facebook Messenger and WhatsApp, as well as virtual assistants like Alexa and Google Home. They employ artificial intelligence and a constantly updated database to facilitate dialogue with real users. According to Business Insider, 60% of individuals in the Gen-X and Millennial age groups have already interacted with a chatbot on a messaging platform.

Insurance companies are discovering how chatbots can enhance various aspects such as sales and marketing, underwriting, claims, and customer service. Chatbots can assist customers by explaining complex products, simplifying complicated service interactions, and directing them toward the appropriate policy. However, insurance companies must be cautious when automating with chatbots due to the intricate and often empathetic nature of many insurance interactions.

The findings suggest a few ways to improve telematics adoption:

  • Make it a priority across the entire company
  • Set goals and measure adoption rates
  • Offer usage-based insurance in preferred channels
  • Promote adoption through word-of-mouth, social media, and customer testimonials.

Nowadays, there is much discussion surrounding artificial intelligence and its applications. While AI has the potential to enhance time and resource efficiency, it is crucial to consider the consequences of errors or malfunctions related to AI.

The National Alliance for Insurance Education & Research suggests that having liability insurance can help cover potential harm inflicted by an AI software or system.

The industry alliance has raised a question worth considering regarding who should be held responsible for a loss caused partly by AI. They are asking whether the liability should fall on the creators, operators, or users of the AI system.

Important factors to consider:

1. Who might bear potential liability?

In case of an AI-related loss, like losses involving multiple parties (such as building losses with several contractors), it’s crucial to pinpoint all potentially accountable parties. This may refer to all individuals involved in the creation, design, installation, and maintenance of the product or service in question.

The alliance clarifies that liability for software could potentially fall on the developer, manufacturer, operator (whether it’s a business or an individual), or end-user.

2. Evaluate the origin and magnitude of the potential harm.

It’s important to assess all possible scenarios and determine the potential risks associated with AI systems, including damage to property, bodily harm, defamation, and intrusion into private life. This will help make informed decisions about coverage and minimize harm.

The assessment of liability will be complex because the AI system interacts with external technologies and vendors beyond the company’s control.

3. It is essential to remain updated with regulations.

The alliance emphasized that organizations must disclose their methods of collecting and utilizing consumer data, which includes data obtained through AI, in compliance with the EU’s GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) regulations.

4. Comprehending the concept of “black box” challenges.

According to the National Alliance for Insurance Education & Research, understanding AI can be difficult because of its complex neural connections. To enhance comprehension, insurance risk specialists and AI developers must collaborate.

5. Acknowledge that conventional approaches may fall short.

The alliance stated that a general policy that fits everyone would not be effective for this unpredictable risk. Specific policies will be developed to address concerns related to cyberattacks, intellectual property conflicts, and liability claims resulting from malfunctions of AI systems. These policies will cater to both AI technology providers and users.

Chubb, AXA XL, Zurich, and Alliance are the insurance companies that currently offer liability insurance policies for AI, as stated by the alliance.

LenderDock Inc. is pleased to announce a broadened partnership with Allied Solutions that will further support P&C insurance providers with an all-digital solution that enables financial third parties to electronically verify and automate lien holder change requests in bulk. This enhanced collaboration will drastically improve the alignment primarily between the auto lending community and the insurance industry and deliver more innovation and operational efficiencies.

“The relationship with Allied represents a significant opportunity to accelerate the adoption of real-time data management and virtually eliminate the millions of hours of manual processing. Our companies’ combined efforts will help reinforce our web-services strategy to each of the respective insurance and mortgage banking segments,” said Frank Eubank, LenderDock’s CEO.

As the largest business process outsourcer (BPO) specializing in auto tracking and risk management, Allied Solutions manages all of their client’s auto and property-related policy verifications and lien holder change requests. Traditionally, most of that activity has been handled by hundreds of service agents via phone or notifications sent by physical mail.

Now through LenderDock’s Verifi™ API and dynamic Correxions™ volume updating solution, insurers are no longer required to service the 500+ million lender-made phone calls, emails, and mailed requests each year.

About Allied Solutions

Allied Solutions is a company that offers insurance, lending, risk management, and data-driven solutions to financial institutions in the US. They have technology-based solutions customized for 4,000 banks and credit unions. They offer a portfolio of innovative products and services from various providers and have multiple offices located strategically across the country. Allied Solutions is headquartered in Carmel, Indiana, and is a wholly owned and independently operated subsidiary of Securian Financial Group.

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.

The Property and Casualty insurance industry is expected to grow, but insurers are encountering obstacles due to shifts in customer behavior, digital changes, regulations, and competition. To address these challenges, P&C insurers need to adjust their strategies and methods of operation. These challenges include managing low-interest rates, keeping up with technology, and achieving profitable growth in a constantly evolving market.

The insurance industry is facing several challenges due to the changing trends in property and casualty insurance.

Overview of challenges confronting the Property and Casualty Insurance industry

In this article, we will discuss the primary challenges faced by the P&C insurance industry and what things your company should be focused on soon.

1. Growing competition

In recent years, the amount of insurance coverage provided by P&C carriers has steadily increased. This increase in supply is expected to continue as more online insurance providers enter the market, leading to more intense competition based on pricing. The changes are leading insurers to expand into new areas and develop new products.

2. Technological progress

The insurance industry has the potential to profit from new digital technologies like augmented reality and networked devices. These technologies can offer fresh sources of revenue and help with industry operations. However, the industry’s slow adoption of new technology has become a major issue. The quick evolution of customer behavior and expectations is due to technological advancements. The insurance industry is struggling to keep up with these changes. To improve efficiency and reduce risk exposure, it is essential to invest in digital platforms and solutions.

3. Obsolete technology framework

The insurer’s growth and ability to regulate costs, meet business demands, and satisfy customers are being hindered using outdated policy and underwriting systems in P&C insurance. Moreover, the profit margins are being affected, and overall efficiency is lowering due to the maintenance and upkeep of these obsolete technologies and processes.

Insurance companies can adopt advanced technologies such as analytics and automation to improve their operational processes including sales and underwriting. This will enhance their capacity to adapt to sudden changes swiftly and reduce downtime, leading to a more resilient and scalable insurance business.

4. Increasing expenses of operations

Outdated software is causing operational costs to increase in the insurance industry. It is necessary to allocate additional resources for the task, which could be made more efficient by implementing a comprehensive modern system. Creating and reviewing mandatory audit reports is time-consuming and requires significant human resources. The use of an electronic system would streamline this process by generating reports quickly and allowing for review and sharing.

5. Enhancing customer interactions

It’s important to prioritize the needs of customers considering digital disruption. To engage customers better, the company should concentrate on improving its operations, processes, and employees. Moreover, it should aim to innovate its products and services while remaining agile and aligned as an organization. The company should also reconsider its business model and put greater emphasis on customers to offer a more personalized value proposition as the digital landscape evolves.

6. Intelligent business insights

Businesses need to use data intelligently to meet customer demands and gain a competitive edge. Extracting valuable insights from large amounts of data – known as business intelligence – is therefore essential. The latest approach to business intelligence is customer-centric and involves using data to inform strategic decisions.

Data is valuable but managing it with outdated methods or technologies is insufficient. By collecting data from different digital sources, carriers can improve underwriting, pricing, and customer experience while reducing losses.

Summary recap

The P&C insurance industry has several challenges such as rising competition, high operational costs, decreased customer engagement, and insufficient business intelligence. Fortunately, many of these problems can be addressed with technology. Insurance companies equipped with the proper tools, platforms, and technology can achieve sustainable growth and overcome obstacles.

A recent report by McKinsey Global Insurance Pool shows that the P&C insurance industry is doing well, with gross written premiums exceeding $1.5 trillion 5 years ago, representing a 5.1% increase from the previous year. Despite facing natural catastrophes, insurance carriers are still financially strong.

Insurance executives have not been idle. Instead, they have been reviewing their existing strategies and preparing for changes in the future. While they are concerned about the effects of digital advancements, this is just one aspect of their conversations. Three topics that have been discussed by P&C CEOs are outlined below, along with potential outcomes for future trends.

1. What transformations will technology bring to the value chain of the insurance business?

The insurance business system involves several stakeholders who each have a distinct role. The process flows from the customer to the retailer or wholesale broker, to the underwriter, to the service agent, and finally to the balance sheet and reinsurance company.

P&C executives are considering using artificial intelligence or automation to create new business models by examining each link in the value chain. For instance, carriers may opt to establish a shared-services organization for tasks such as claims. Additionally, vertical integration is being considered as an option.

Insurance companies are observing the evolving value chain and trying to predict when it will change and what factors will drive the change. Technology has already reshaped personal lines, and it is expected that small businesses will also follow this trend in the next few years. However, it may take up to a decade for mid-sized and large corporate segments to modernize.

2. What impact will smart homes and the future of mobility have on carriers that primarily emphasize personal lines?

Advancements in technology are reducing the potential dangers of home and auto products. With the increasing use of sensors in smart homes, appliances, and equipment can identify issues and alert owners beforehand, preventing damage.

The auto insurance industry is experiencing a major technological disruption, especially regarding the coverage of autonomous vehicles. There are around 1,000 property and casualty insurance carriers in the US, and over 75% of them rely on auto insurance revenue to sustain their business. Currently, ride-sharing services have already impacted the industry, but with autonomous vehicles, the risk of accidents and ownership will decrease, which means the risk will shift from individual owners to commercial owners. This and other factors will significantly reduce the amount of money that insurance companies will be paid for premiums.

Several options are available for carriers that rely on personal auto. They could opt for consolidation like the seven largest P&C insurers. Alternatively, they could diversify by expanding into home, commercial, or specialty products. Finally, they could explore opportunities that involve new types of risks.

The second option requires figuring out how technology will change the risk and how to manage it. For instance, with transportation being more of a mobility service, what risks should be insured and how? Likewise, in houses equipped with sensors, if a flood happens because of a faulty water heater, who is responsible? Addressing these questions could result in fresh possibilities.

3. Can the existing profit distribution be maintained over time, and what factors could influence its equilibrium?

In the past, distributors have received most of the profits in the industry. Currently, brokers have a return on equity of over 25 percent, while insurers typically see a return of around 8 percent.

What makes distributors so advantageous is that they have a strong connection with the customers, allowing them to establish better relationships and enhance loyalty. Furthermore, the manufacturing and distribution balance favors distribution because manufacturing lacks the level of individualization that services offer.

To gain a stronger position, carriers can work on becoming the preferred choice for customers. This can be achieved by offering products that are likely to keep customers loyal. By doing this, carriers can establish a direct relationship with their customers, bypassing any middlemen in the process.

Changes in the industry offer chances for development and innovative business strategies. P&C insurance providers do not need predictive abilities, but rather a realistic understanding of where the potential for success exists.

It’s crucial for insurers and their partners to stay vigilant against constantly evolving cyber threats and collaborate to reduce cybersecurity risks in the ecosystem.

The insurance industry relies heavily on digital ecosystems involving multiple stakeholders. A survey found that 84% of insurance executives view these ecosystems as a vital part of their business strategy. By 2025, it is predicted that these ecosystems will generate around 30% of the world’s insurance revenue, according to McKinsey.

Ecosystems present Insurers with growth opportunities, but these opportunities also come with complex and challenging cybersecurity risks.

According to Gartner, the insurance industry’s digital ecosystems are at a greater risk of cyberattacks as the global number of active IoT devices reaches 123 billion. Enterprise web applications are expected to experience a surge in data breaches caused by API attacks, making it the most common form of attack vector by the end of 2022.

In a digital environment, there are several common cybersecurity issues that can occur, including:

  • A lack of control and visibility makes it challenging to manage and monitor assets and application components in the cloud.
  • The use of microservices in digital ecosystems has the potential to improve access for users both within and outside the organization.
  • In microservices architectures, the data is frequently moved, modified, and accessed. This means data breaches can happen even if the communication channel is not exposed, and hackers can exploit weaknesses.

How insurers can protect their digital systems:

Collaborative approach required: Ecosystem partners need to revamp security measures and foster teamwork

Insurance companies must collaborate with their partners, third-party vendors, and even their competitors to combat cybercriminals, who often work together for success. To enhance their resilience, businesses need to review their security strategy to protect themselves, their network, and their partners.

To ensure open-source security, software developers and security teams must voluntarily collaborate. They should keep track of any cybersecurity incidents and dangers they come across and share that information transparently with each other. This includes the knowledge they gain, allowing them to identify and tackle threats effectively.

Insurers and vendors can improve their security by sharing their tools through open-source software. This allows them to receive feedback and offer their own protection to others while working together to establish a unified defense for their networks.

Embrace early detection: A wise investment

In an open-source digital ecosystem, it’s important to detect cybersecurity breaches early on. These attacks can cause a considerable amount of damage if they go unnoticed for weeks. It’s crucial to respond quickly and efficiently to identify the source of the breach, the affected systems, and the extent of the damage. Doing so will help neutralize the threat before it can cause any severe harm.

SIEM software helps companies proactively detect and mitigate security threats on their network to prevent disruptions to business operations.

By collecting and analyzing data as soon as it is captured from applications, cloud environments, and networks, security, and IT teams can automatically manage event logs and network flow data in a single location.

Implementing zero-trust security: Treating everyone as a potential threat

Zero-trust architecture is a security approach that assumes that every connection and endpoint could pose a threat to an organization’s assets, data, applications, and services. This means that both internal and external sources are considered potential threats, and all connections are secured, even those already established within the organization.

Currently, approximately 60% of organizations in North America are working on zero-trust projects. Meanwhile, around 50% of companies in the insurance and finance industries have identified zero-trust security models as a high-priority area for their businesses.

Furthermore, the security model evaluates whether the connection complies with the security policies and protocols of the organization. By enforcing access restrictions, users are limited to accessing only the necessary information and are unable to access any additional data.

Implementing and maintaining a zero-trust security approach may be difficult for insurance companies that still rely on outdated technology. This method demands continual real-time authentication and verification to regulate user access. However, antiquated software may lack the necessary authentication, validation, and monitoring capabilities, which can impede the rollout of this security strategy.

Enhance security with robust authentication protocols

It is recommended that insurance companies utilize technology such as Privileged Access Management (PAM) SaaS to establish a zero-trust security approach. This can help reduce the number of entry points for cyber attackers and minimize the extent of damage caused by both internal and external attacks.

To access the system, users with special permissions need to have their credentials checked and are limited in what they can do. The security tools of the system utilize automation and user-friendly options to establish programs for privileged entry and a security framework based on zero trust.

Data segmentation

To protect customer and company information and resources, it is crucial to segment data. This means limiting access to data and allowing users to access it only when necessary and appropriate.

Studying how people use network servers can make it easier to see what’s happening and improve security in a digital environment.

One way to protect resources is by using distributed resource protection mechanisms (DRPM). This verifies client or partner profiles and only grants capability tokens to those who meet the criteria.

To control a user’s access to resources, it is crucial to implement time limits and issue tokens that expire quickly. As the user becomes more reliable, the validity of their token can be expanded over time by the provider of the resources.

Regularly conduct stress tests

A stress test is a method used to evaluate the ability of your application, system, or software to withstand extreme conditions. The objective is to detect any weaknesses, enabling you to reinforce security measures before cyber attackers make attempts to exploit them and break into your organization’s or partner’s network.

IBM’s study found that organizations that have incident response teams and tested response plans experience data breaches that cost $2.46 million less than those without such measures in place.

Insurers have various methods to conduct stress tests.

To identify vulnerabilities in their computer systems and networks, some companies opt to hire external investigators. First American Bank, for example, spends about $10,000 annually on these investigations to infiltrate their network systems.

To effectively test security measures and evaluate your team’s response to a major cyber threat, simulating a real-world scenario is the best approach.

Ecosystem partner evaluation: A comprehensive approach

Accenture’s report shows that while 97% of insurance companies believe they have the necessary qualities to be a desirable ecosystem partner, only 26% of those insurers feel that their ecosystem partners are equally committed to enhancing their security resilience.

Insurance companies need to perform a security assessment or audit before adding new partners to their systems.

Insurance companies are depending on third-party vendors such as cloud service providers and software-as-a-service to grow their digital operations. To safeguard their data, it is crucial for them to select vendors who possess strong data handling strategies and excellent cybersecurity credentials.

Find Service Organization Control 2 (SOC 2) certification

The SOC 2 certification is a report that confirms that service providers adhere to specific standards for managing customer data. It involves an auditing process created by the American Institute of CPAs (AICPA) and is widely used in the industry to evaluate internal controls.

To obtain SOC 2 certification, a vendor must undergo a rigorous audit that verifies their compliance with IT security standards. The audit assesses the efficiency of their data security policies and systems, processing accuracy, confidentiality, and protection of customer information.

LenderDock itself is SOC 2 certified and has put in place monitoring of the health of these systems by automating most areas and has a dedicated team that oversees the performance.

In other words, your data is secure, and your process is simplified using LenderDock’s services.

Take immediate action!

Although there is a risk involved in providing vendors with access to customer data, transaction information, and digital assets, the benefits of these systems guarantee their continued use.

It’s important for insurers and their partners to stay updated on the most recent cyber threats and work together to decrease the risks of cybersecurity in the system. Taking prompt action is crucial.

LenderDock Inc., the leading provider of online Property and Casualty Insurance policy verification and automated lienholder process management services, announced a new partnership with Oklahoma Farm Bureau Insurance.

“LenderDock is thrilled to be partnered with Oklahoma Farm Bureau.  They are committed to optimizing and improving their internal business workflows through technology in order to serve their customers and members better.  Doubling down on process automation is going to assure their ability to meet the growing demands for operational efficiency,” said Frank Eubank, LenderDock’s CEO.

Oklahoma Farm will take full advantage of LenderDock’s Verifi™, Correxions™, and LenderDocs™ solutions.

Verifi™ is a real-time insurance policy verification system designed for verifiers and lenders. With Verifi™, phone calls for policy verification are a thing of the past, making the process faster and more efficient.

The second tool, Correxions™, automates the process of updating policy information by allowing lenders to submit corrections directly to the carrier. This enables carriers or providers to process the updates efficiently according to their own procedures.

Finally, LenderDocs™ provides electronic and real-time access to important policy-related documents such as EOIs, Certificates, and others to financial third parties. This helps streamline the process of obtaining and sharing these documents, making it easier for business partners to manage their policy information.

“As Oklahoma Farm Bureau Insurance continues to strive toward optimal operational efficiency, LenderDock provides an important component to streamline customer service in the area of policy additional interests,” said Erin Gillespie, Business Analyst at Oklahoma Farm Bureau.

He added, “Enhancing data accuracy will improve additional interest communication including timeliness of payments for accounts receivable. But the primary benefit is the time freed up for our staff that can be funneled into other initiatives for policy administration and an improved overall customer service experience.”

About Oklahoma Farm Bureau

The Oklahoma Farm Bureau was organized in 1942 by Oklahoma farm and ranch families. Soon after, many members of the Bureau realized auto insurance was a service many of the state’s farmers and ranchers needed most. In 1957, they became affiliated with what is today known as Farm Bureau Life Insurance Company to offer life insurance products to Oklahoma Farm Bureau members. Today, OKFB has offices in all 77 counties in the Sooner State.

About LenderDock Inc.

Headquartered in Salt Lake City, Utah, LenderDock Inc. is the leading provider of online Property and Casualty Insurance policy verification and automated lien holder process management services. The policy verification-as-a-service (VaaS) platform offers banks, lenders, and financial third parties the ability to digitally verify and correct home and auto policy-related data in real-time.

Why are insurance companies and brokers being inundated with requests for evidence of homeowner’s insurance?

It is complicated to keep track of homeowners insurance coverage for mortgage loans. This is because mortgage servicers frequently change, which makes it hard for insurers to maintain accurate records. Homeowners may have more than one loan, insurance coverage of different types, and different insurance providers. Specialized risks like flood coverage may be impacted by legal requirements modifications. Sharing insurance data for monitoring purposes currently involves high expenses and long waiting periods. However, automating these information exchanges can improve the overall customer experience and save costs.

The information below explains the technology that is advancing the industry of insurance.

What is the significance of homeowners insurance in the mortgage process?

Having insurance coverage is important when getting a mortgage as the mortgage company wants to protect their financial interest in the property. To do this, they transfer the risk of loss for all the properties they have loans on to a lender-placed insurance provider. The provider needs to monitor homeowners’ insurance coverage to manage their financial exposure.

What is the process for verifying insurance?

To verify insurance, there are different methods available including Electronic Data Interchange (EDI), phone, website, U.S. mail, and email. However, if evidence of insurance is missing, the homeowner, agent, or insurance company of record must be contacted to obtain the information. This can result in a high volume of disruptive phone calls. For example, in 2021, Assurant made 1.9 million calls to agents and carriers to obtain evidence of insurance.

Regarding EDI, what should be considered?

EDI is a popular standard in the industry that allows for batch exchange of information. However, it has not undergone significant changes in the 50 years it has existed. EDI only allows for one-way exchange of information and the process can be problematic due to incomplete coverage and policy number information, making it difficult to verify coverage. Up to 80% of the time, there is missing information that needs validation. Using technology can simplify tedious tasks and enhance the experiences of the agent, policyholder, and carrier by optimizing outdated processes.

Today, is there an improved alternative option available?

The technology based on Application Programming Interfaces (APIs) has effectively simplified the exchange of information. LenderDock has utilized this technology to create their Verifi™ platform, which acts as a connection between systems, removing the need for manual interfaces. This real-time solution offers functions such as easy search and review of policies and updates of mortgagee clauses. As a result, agents and carriers experience fewer complications.

What advantages can be gained?

LenderDock has observed that when a carrier adopts API technology, there is typically a 60-70% decrease in the need for manual data exchanges (like phone calls and paper) within the initial 30 days. The reduction of manual data exchanges can have positive downstream effects, including:

  • An enhanced experience for policyholders
  • Improved precision of data
  • Savings in carrier costs
  • Agents dedicating more time to customer service and less time to insurance verification requests
  • By using less paper, you can feel good about making a positive environmental impact and conserving resources such as trees, water, and electricity.

What are the results for carriers?

“LenderDock has been an absolute game-changer. We’re not only saving thousands of dollars in manual resources but have been able to refocus my entire team’s efforts around our service and client retention goals. It exceeded our highest expectations,” says Debbie England, Manager of Customer Service & Support at Indiana Farm Bureau.

“The amount of calls in our Customer Service Department has decreased by about 40%. The amount of paper changes we receive is almost down to zero after just 8 months with LenderDock,” said Stacey Manzo, AVP Customer Service & Corporate Secretary at The Philadelphia Contributionship.

Learn more about how LenderDock can help your business at lenderdock.com.

To keep up with rapidly advancing technologies and customer expectations, insurance companies must enhance the capabilities of their conversational AI systems.

While chatbots may be confusing and not always helpful, they are still popular among consumers because they are available 24/7. A study has shown that 81% of people prefer self-service options when doing business online.

Although ChatGPT is a promising solution, chatbots are generally not very intelligent. Meeting customer demands will require exploring other methods of enhancing artificial intelligence.

To improve chatbots, your organization should implement three strategies. These strategies can help to increase customer satisfaction, provide more opportunities for business growth, and enhance your reputation.

Assist them in discovering additional solutions

Typically, chatbots have difficulty remembering previous conversations and may not be able to keep up with the context. They rely on a decision tree system that recognizes certain keywords in the user’s input to generate a response, which may not be sufficient. While most customers expect customer service to have access to their previous interactions, only about 15% do.

A major challenge in quickly getting accurate information is connecting the internal record systems that contain valuable data to address customer inquiries and demands. To overcome this, companies can use intelligent process automation to integrate business systems, access important information such as previous orders, payment plans, or insurance claims, and efficiently supply the details through the chat app designed for customer interaction.

Insurance companies offer a chatbot feature that enables users to monitor the status of their insurance claims. Besides, this feature can also assist with more complex inquiries, such as “What are the remaining documents I need to provide?” As chatbots grow more sophisticated, there is an opportunity to combine intelligent automation with conversational AI.

Improve their cognitive skills

If we want to develop a digital assistant that can talk like a human, we need to do more than just connect data to customer chat bubbles. It’s essential to train chatbots to process unstructured data so that they can communicate like humans, rather than forcing humans to communicate like computers.

To enhance enterprise systems, you need expertise in document AI, which can harness capabilities such as intelligent document processing to analyze, interpret, and comprehend unstructured data. This enables you to make better decisions, provide more precise and complete responses to inquiries, and expedite request processing.

Our IDP technology incorporates machine learning to enhance the learning and development of your chatbots over time. By leveraging ML, your customers will avoid repeated frustrations arising from incorrect responses or options. The chatbot stores past conversations and learns from mistakes to make accurate choices in the future. Additionally, these interactions reveal vital information such as customer pain points, leading to improvements in the overall customer experience by evaluating the popularity of services.

Currently, it’s possible to improve your chatbots by adding “brains” through low-code/no-code IDP products. This process doesn’t need significant IT resources and is a simple “plug and play” way to upgrade your digital customer service representative.

Transform them into a detective

Confirming the identity of customers is a major challenge for chatbots. This involves verifying relevant documents like proof of address or identification due to the high rate of identity theft in the United States. However, this verification process should not cause too much inconvenience for users, who may not desire to switch between screens or use a camera to validate their passwords.

AI technology can be used to instantly verify people’s identities by scanning their faces in live videos and photos and comparing them to their official ID photos. This enhances security and improves customer service. Additionally, machine learning technology can quickly identify security issues in documents such as utility bills, tax forms, or earnings statements, making it easy to spot any tampered documents. Gartner predicts that 85% of organizations will use document-centered identity-proofing technology for onboarding procedures by next year. This technology is integrated into your chatbot platform, working like a human brain and quickly adapting to new input, resembling a mini forensics lab.

Get ready to be more personal

According to Forrester analysts, 90% of customer service leaders believe that personalization is essential for the future of automation. Nonetheless, their efforts to transform are being held back by the limitations of current chatbot technology. These leaders acknowledge that improving interactions with digital assistants is crucial as more and more conversations take place online. They also realize that their chatbot must be available constantly across all channels since people now prefer to engage through mobile devices.

OpenAI has released a new chatbot known as ChatGPT, which showcases the capabilities of artificial intelligence in creating personalized experiences. Though there are risks involved, such as potential biases, the technology provides significant benefits to customer interactions. As we previously mentioned, ChatGPT is a highly advanced chatbot that offers sophisticated responses, utilizing AI for optimization. Microsoft is going to add ChatGPT function to its Microsoft 365 suite, connecting it to intelligent document processing. This will improve the chatbot’s capability to comprehend data and offer personalized responses. Right now, ChatGPT requires human oversight for responsible use. However, with additional training and integration with other forms of intelligent automation, it’s expected to change the way chatbots are used in customer service.

To offer an exceptional digital customer experience, utilizing AI-powered technology is essential.

SALT LAKE CITY – LenderDock Inc., the leading provider of online Property and Casualty Insurance policy verification and automated lienholder process management services, announced a new partnership with North Carolina Farm Bureau.

“We are proud to be working with North Carolina Farm Bureau. They are a carrier that continues to focus on improving how they serve its customers and partners. Their commitment to efficiencies and operational effectiveness is to be admired,” said Frank Eubank, LenderDock’s CEO.

NC Farm Bureau has partnered with LenderDock to provide additional tools for their clients. The first tool, Correxions™, automates the process of updating policy information by allowing lenders to submit corrections directly to the carrier. This enables carriers or providers to process the updates efficiently according to their own procedures.

The second tool, Verifi™, is a real-time insurance policy verification system designed for trackers and servicers. With Verifi™, phone calls for policy verification are a thing of the past, making the process faster and more efficient.

Finally, LenderDocs™ provides electronic and real-time access to critical policy-related documents such as Evidence of Insurability (EOI), Certificates, and others to financial third parties. This helps streamline the process of obtaining and sharing these documents, making it easier for business partners to manage policy information.

About North Carolina Farm Bureau

The North Carolina Farm Bureau Federation was formed in 1936 as a non-profit general farm organization to serve farmers and provide a unified voice for the interests and needs of the farming community. Today, North Carolina Farm Bureau serves as an advocate for our members at the local, state, national, and international levels – providing educational, economic, public affairs, marketing, and various other services to our members.

Over the years, the North Carolina Farm Bureau Federation has grown into the largest general farm organization in the state with more than 500,000 member families.

About LenderDock Inc.

Headquartered in Salt Lake City, Utah, LenderDock Inc. is the leading provider of online Property and Casualty Insurance policy verification and automated lien holder process management services. The policy verification-as-a-service (VaaS) platform offers banks, lenders, and financial third parties the ability to digitally verify and correct home and auto policy-related data in real-time.