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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
Business Featured General Insurance

The most recent developments in sophisticated technology provide insurers a significant chance to prosper in a fiercely competitive business.

It is therefore not surprising that many insurance companies are embracing digital transformation. According to a recent Gartner poll, most insurers want to decrease their expensive infrastructure investments and boost their use of cloud technology.

However, to be genuinely effective, insurance carriers must first make sure that the data underlying these potent technologies can be trusted to produce the best outcomes.

In the sections that follow, we examine how modern technology may affect the insurance sector and how data integrity may be the key to success.

Revolutionizing the insurance sector through technological innovations

Without a question, during the past few years, technology has radically changed the sector.

For instance, insurance companies are now able to use artificial intelligence (AI) and machine learning (ML) models to quickly identify fraud and reveal new business insights, to automate processes for underwriting and claims processing, and even to drive hyper-personalization for higher levels of customer satisfaction.

The insurance industry is beginning to appreciate the promise of cutting-edge technology, but the key to realizing its full potential lies in the data that powers it.

A comprehensive look at data integrity

Data integrity, or reliable data that is accurate, consistent, and contextual, is crucial for insurers given the industry’s continuous adoption of technology.

It is crucial for insurers to have data integrity, or reliable data that is precise, consistent, and contextual, given the industry’s continuous adoption of technology.

Insurers may use cutting-edge technology to lower risk, improve customer experience, and increase overall operational efficiency by utilizing the four fundamental pillars of data integrity: data integration, data governance and quality, location intelligence, and data enrichment.

Challenges in integrating data

Data exists in many different formats and is stored in silos throughout the insurance industry, including antiquated legacy programs.

For insurers, the existence of data silos is a major issue since it hinders communication and collaboration between groups like marketing, sales, and customer support.

Business leaders will observe a decline in overall productivity and a rise in expenditure if erroneous data is disseminated within the organization.

By integrating data from disparate silos and platforms into contemporary cloud-based data environments, businesses may operate more efficiently and realize tremendous value through data-driven decisions.

Insurers can improve business performance, cut costs, and, in the end, contribute to supplying advanced analytics and technologies with timely and accurate data by building a single, integrated data pipeline that makes legacy business data accessible for data quality initiatives while extending the usefulness of mission-critical systems.

Enhancing data governance and quality for insurers: Strategies for improvement

To innovate and acquire a competitive edge, insurers must make the most of their vital internal data since doing so helps them to gain the analytical insights necessary to boost growth and improve business results.

Business executives who want to gain deeper business insights and analytics insights might benefit from smart data governance techniques that can help them identify and comprehend the meaning, ancestry, and linkages of data.

As an illustration, a lot of users waste a lot of time on their systems looking for the appropriate data and debating the veracity of the information.

Businesses may put the technical assets they are utilizing in context by using data governance to give technical asset definitions, ownership, and data lineage.

The data will also be more reliable if a data governance solution is implemented that offers visibility into the data quality standards and ratings of data assets.

When using sophisticated analytics and AI across growing data quantities, it is essential to ensure high levels of data quality.

When insurance companies guarantee the correctness of policies, claims, and other crucial business data, it assumes an even greater significance as a means of preserving their good name and fostering client confidence.

Methods for insurers to boost the reliability of their data

Location intelligence and data enrichment are essential for advancing data-driven change in the insurance sector.

Consider the increase in weather and wildfire incidents that establish new records. More context is needed than ever for underwriters to appropriately assess risk and set policy prices.

That is made possible by highly accurate property data combined with world-class geocoding and data enrichment that offers insights into the risk of wildfire, the characteristics of the property, neighboring risks, and more.

Customers’ need for personalization has significantly increased in recent years across all industries.

Insurance firms can gain access to strong, previously untapped insights that can be used to elevate the customer experience by streamlining the process of enhancing client data.

August 24, 2023
Business Featured General Insurance

In the fast-paced world of insurtech, the role of risk data analytics and centralized risk data platforms cannot be overstated. These innovative tools are instrumental in analyzing and mitigating risks in the insurance industry.

As underwriting departments evolve, the ability to consolidate all risk data into a single data lake is powering their transformation. This strategy enables insurance carriers to unlock the immense potential of data analytics, facilitating informed decision-making, proactive risk management, and improved customer interactions. In this article, we will explore the rising importance of constructing a singular risk data platform, along with an integrated data analytics suite, and its transformative effect on underwriting departments in insurance carriers.

The Role of Centralized Risk Data Platforms

A centralized data platform acts as a single repository for all risk-related data, providing a comprehensive view of risks to all stakeholders. This platform has the capability to collate risk data from various sources, both paid and unpaid. It encompasses policyholder information, claims history, and also external data such as weather patterns, market trends, satellite imaging, IoT devices, drones, spatial imaging, demographic insights, and site survey data. Armed with a 360-degree overview, underwriting departments can better understand potential risks, optimize pricing and product decisions, and collaborate with loss control departments to deliver robust risk management strategies in real-time.

Historically, data sources have been accessed by multiple business units according to their specific needs, resulting in data being isolated in various silos across the organization. However, there is now an opportunity to merge these diverse data sources into a single risk data platform. This integration streamlines data management processes, reduces the chances of errors, and increases operational efficiency. Ultimately, this leads to more reliable underwriting decisions and enhanced loss control efficiencies.

The Power of Data Analytics

Data analytics, combined with a centralized platform, can provide real-time insights into various factors and patterns. As data is continually updated and analyzed, underwriting and loss control departments can swiftly react to emerging risks and adjust their risk management strategies as required. This agility is particularly invaluable in rapidly fluctuating scenarios such as weather-related events or economic fluctuations.

Insurance carriers can leverage a centralized data repository and advanced analytics tools to make data-driven decisions across numerous operational aspects. This includes adjustments to pricing and coverage, proactive risk mitigation measures, the creation of new products, and the identification of market threats. Decisions backed by solid data lead to more informed and accurate choices, maximizing profitability and strengthening customer engagement.

Enhancing the Customer Experience

A centralized platform brings numerous benefits, one of which is an enhanced customer experience. By having access to comprehensive customer data, insurance carriers can offer tailored policies, products, and services that specifically address the unique requirements of each business. This personalized approach ensures a superior level of satisfaction and meets the specific needs of their customers. Real-time data analysis empowers quick and efficient claims processing, paving the way for prompt responses to customer requests. By leveraging this technology, businesses can build trust and loyalty by meeting their customers’ needs with utmost speed and accuracy.

Transforming Underwriting and Loss Control Departments

The combination of data analytics and a centralized risk data platform is truly transforming the underwriting and loss control departments in insurance carriers. This powerful amalgamation is bringing about a revolution, enabling more accurate risk assessment and enhanced decision-making capabilities for insurers. By harnessing the power of data, these departments can now operate with greater efficiency, agility, and precision, ultimately contributing to improved profitability and customer satisfaction.

By having a centralized repository to capture, integrate, and analyze vast amounts of data, carriers gain the ability to make informed decisions backed by data. This empowers them to proactively manage risks and deliver exceptional customer experiences. It’s all about using data-driven insights to drive impactful outcomes in the industry.

In the dynamic landscape of insurtech, where transformative technologies, open systems, AI, and inventive data-centric structures are embraced, underwriting and loss control divisions are enhancing their resilience, efficiency, and customer focus. This trajectory is propelling the insurtech sector towards a future characterized by innovation and rapid expansion.

Wrap up

In conclusion, the emergence of centralized risk data platforms and data analytics is reshaping the landscape of InsurTech. These advanced tools are enabling insurance carriers to harness the power of data and make informed decisions that drive profitability and customer satisfaction. By consolidating risk data into a single repository and leveraging data analytics, underwriting and loss control departments are becoming more agile, efficient, and customer-centric. As the insurtech sector continues to evolve, the adoption of these transformative technologies will pave the way for a future of innovation and rapid growth.

Insurance carriers can also use a centralized data repository and advanced analytics tools to make data-driven decisions across numerous operational aspects. These include adjustments to pricing and coverage, proactive risk mitigation measures, the creation of new products or identification of market threats. Decisions backed by solid data lead to more informed and accurate choices, maximizing profitability and strengthening customer engagement.

A centralized platform offers numerous benefits that greatly enhance the customer experience. By having access to extensive customer data, insurance carriers can create tailored policies, products, and services that cater specifically to their individual business needs. This level of personalization ensures an exceptional customer experience and sets insurance carriers apart from the competition.

Utilizing the capabilities of real-time data analysis, the process of claims processing can be revolutionized, rendering it swift and efficient. This capability empowers businesses to promptly address customer inquiries, cultivating a foundation of trust and loyalty. This streamlined approach instills confidence in customers, ensuring that their requirements are met promptly and accurately, thereby cultivating enduring affiliations with your brand.

The convergence of data analytics and a centralized risk data platform is spearheading a transformative evolution within insurance carriers’ underwriting and loss control divisions. This formidable fusion equips carriers to make judicious decisions based on comprehensive insights, accurately evaluate risks, and heighten overall operational efficiency. The adoption of this cutting-edge technology stands as a pivotal game-changer within the insurance realm.

The prowess to amass, integrate, and analyze this wealth of data within a singular repository empowers carriers to execute vital, data-powered choices, proactively manage risks, and deliver unparalleled customer experiences.

In the dynamic trajectory of the insurtech arena, characterized by the assimilation of transformative technologies, open systems, AI, and pioneering data-centric frameworks, underwriting and loss control divisions are poised to fortify their resilience, efficiency, and customer-centric focus. This trajectory propels the insurtech sphere into an era of innovation and rapid expansion, charting a course toward a future defined by progressive growth.

August 17, 2023
Featured General Insurance Press Release

LenderDock Inc., the leading provider of online Property and Casualty Insurance policy verification and automated lienholder process management services, is pleased to announce an expanded partnership with Ohio Mutual Insurance Group.

“Ohio Mutual is an insurer who is constant in their commitment to optimizing their business processes and support of their customers through innovation and technology. Their team demonstrates a high level of competency, quality, and expertise in doing what is best to deliver both the best possible internal and customer-facing experience,” said Frank Eubank, LenderDock’s CEO.

Having already implemented the use of LenderDock’s Notifi™ solution, Ohio Mutual will add the use of LenderDock’s Base suite, which includes Verifi™, Correxions™, and LenderDocs™.

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.

“We identified the need to optimize our e-notification process to financial interests in order to reduce waste and align with our corporate commitment to continuous improvement,” said Bethany Foy, Continuous Improvement Leader at Ohio Mutual. “LenderDock provides industry-leading tools that help us to solve a number of business challenges, and reduce interruptions to our associates and agents. Ohio Mutual’s partnership with LenderDock is a true win-win.”

About Ohio Mutual Insurance

Based in Bucyrus, Ohio, Ohio Mutual Insurance Group traces its roots to 1901 when the Ohio Mutual Tornado, Cyclone and Windstorm Insurance Association began providing insurance to property owners across Ohio. The company now operates in seven states across the Midwest and New England.

Ohio Mutual has earned the prestigious “A” Excellent rating from A.M. Best for more than 30 consecutive years, and has been named as a member of the “Ward’s 50” nine times since 2009 — independently recognizing Ohio Mutual among the nation’s Top 50 property and casualty insurers.

About LenderDock Inc.

LenderDock Inc., based in Salt Lake City, Utah, is the foremost provider of online services for verifying Property and Casualty Insurance policies and managing lien holder processes. Their cutting-edge platform, known as policy verification-as-a-service (VaaS), empowers banks, lenders, and other financial entities to instantly validate and rectify home and auto policy data through digital means.

Contact Ohio Mutual

Todd Boyer, VP Corporate Communications
Ohio Mutual Insurance Group
[email protected]
419.563.0664

August 15, 2023
Business Featured General Insurance

The insurance sector is on the brink of significant transformations in 2023, as it confronts various obstacles and possibilities. In this article, we will examine five daring forecasts for the insurance industry in the upcoming year. From the slowdown in premium expansion to talent scarcity and the influence of inflation, we will delve into the pivotal factors that will shape the future of this industry. Furthermore, we will highlight the opportunities that arise from a heightened awareness of risk and the convergence of different sectors. So let us plunge into an exploration of what lies ahead for the insurance industry in 2023.

Forecast 1: Slowing down premium expansion

One notable challenge that awaits the insurance industry in 2023 is a deceleration in genuine premium expansion rates. The once-promising global economic recovery has been overshadowed by increasing uncertainties surrounding growth projections. Consequently, there have been consistent downward revisions to global GDP forecasts, which directly impact premium growth prospects for both life and non-life sectors.

In the year 2023, there is a projected global growth rate of 2.2% for non-life insurance premiums, which represents a decrease from the previous year’s expectation of 3.3%. This decline can be primarily attributed to the continued increase in rates within commercial lines. However, it is anticipated that emerging markets will surpass advanced economies, with an estimated real growth rate of 3% in 2022 and further acceleration to 4.2% in 2023.

Forecast 2: Escalating talent shortage

The scarcity of talent within the insurance industry is expected to intensify even more in 2023. The challenge of attracting and retaining top-notch professionals has been persistently difficult due to factors such as an aging workforce and a higher frequency of retirements. To address this talent gap effectively, forward-thinking insurers must explore innovative strategies like harnessing AI solutions. Furthermore, effectively communicating their brand’s purpose and cultivating a shared vision for creating a safer and healthier world will resonate strongly with younger generations who are entering the workforce.

Forecast 3: The influence of inflation on operating expenditures and claims expenses

Insurers are predicted to face amplified operating expenditures and claims costs in 2023 due to inflationary pressures. Present inflation rates have soared to levels not seen in decades, and while a decline is projected, they will remain higher than historical averages. This will significantly impact the entirety of the value chain, encompassing expenses such as customer acquisition, claims processing, overall expenses, and indemnity.

The challenges posed by wages, healthcare expenses, energy costs, and social inflation are anticipated to persist. Insurers must anticipate and effectively address the consequences of sustained inflation on their operational expenditures as well as claims-related costs. Meanwhile, disruptions within the automotive and property sectors’ supply chains—reaching alarming levels of 40%–60% in 2022—are also expected to continue amidst this climate characterized by rising prices.

Forecast 4: Rise in nominal premiums due to inflation

Although inflation poses challenges, it also presents opportunities for the insurance sector. In 2023, insurance providers can strategically adjust prices for both new and existing policies to take advantage of their flexibility. This will result in higher revenue growth figures and short-term improvements in premium growth, operating expense ratios, and claims ratios compared to pre-inflation measurements. Expected interest rate hikes in major markets will further enhance investment income, strengthening underwriting outcomes.

Forecast 5: Heightened risk awareness and convergence

The COVID-19 pandemic has increased awareness of various risks such as health and mortality risks, extreme weather events, and socio-political instability. This heightened awareness has created a widespread perception of underinsurance that affects individuals’ well-being both financially and health-wise. Looking ahead to 2023, insurers have a unique opportunity to expand their range of products particularly focusing on health protection along with financial security.

The insurance industry has the potential to benefit greatly from the convergence of different sectors, driven by the growing recognition of risk. By utilizing technology and data analytics, insurance companies can create innovative solutions that cater to evolving customer requirements and offer comprehensive coverage.

In conclusion

In conclusion, the year 2023 presents a dynamic landscape for the insurance industry. Although challenges such as slowing premium growth, talent scarcity, and inflation’s impact persist, there are also opportunities to capitalize on the increased awareness of risk and industry convergence. By embracing innovation, fostering a shared vision, and addressing changing customer needs, insurers can position themselves for future success.

It is important to remember that change is inevitable for the insurance industry to thrive. Staying ahead of trends and embracing bold predictions for 2023 will be key to adapting effectively.

August 10, 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
Automation Featured General Insurance

With the pervasive need for always being connected and having access to data everywhere, APIs (Application Programming Interfaces) seem to be the de-facto way of sharing this information between systems and users.  The Insurance Industry, although traditionally technologically stagnant or reticent to change, is opening to the fact that facilitating information exchange digitally is the way to go. This article explores how APIs are revolutionizing the insurance sector by facilitating digital information exchange. 

Streamlining Operations

Traditionally, the insurance industry has been burdened with manual and time-consuming processes, leading to inefficiencies and delayed services. APIs offer a solution to automate various tasks and streamline operations. Insurers can integrate APIs with their existing systems, such as policy management, claims processing, and underwriting, to create a cohesive and interconnected ecosystem. This integration enables real-time data synchronization, reducing errors, and eliminating duplicate data entry. 

APIs also enable insurers to connect with external data sources, such as government databases or credit agencies, to verify customer information during the underwriting process. By automating these verification procedures, insurers can accelerate the decision-making process and offer more accurate risk assessments. 

Enhancing Customer Experiences

In the digital age, customers expect seamless and personalized experiences. APIs play a crucial role in meeting these demands by allowing insurers to provide a unified and user-friendly interface across different channels, including websites, mobile apps, and third-party platforms. 

With APIs, insurance companies can offer self-service functionalities to customers, allowing them to access policy information, file claims, and make policy changes effortlessly. Furthermore, APIs facilitate real-time communication, enabling insurers to send policy updates, renewal reminders, and important alerts directly to their customers’ preferred channels. 

By harnessing the power of APIs, insurers can leverage customer data to offer personalized products and services, tailored to everyone’s unique needs and preferences. This level of personalization not only boosts customer satisfaction but also strengthens customer loyalty and retention. 

Enabling Insurtech Collaboration

The rise of insurtech startups has disrupted the traditional insurance landscape. These innovative companies often specialize in niche insurance products and leverage advanced technologies to enhance the customer experience. APIs act as the bridge between traditional insurance incumbents and insurtech disruptors. 

Through open APIs, insurance companies can collaborate with insurtech firms, offering their products and services on digital platforms. This collaboration allows insurers to tap into new markets, attract tech-savvy customers, and stay competitive in an evolving industry. 

Driving Innovation

APIs are at the core of innovation in the insurance sector. They empower insurance companies to experiment with new ideas, develop proof-of-concept projects, and scale successful initiatives rapidly. By opening their data and services through APIs, insurers can foster a developer community that creates innovative solutions and applications on top of their infrastructure. 

Additionally, APIs enable insurers to integrate emerging technologies like Artificial Intelligence (AI), Internet of Things (IoT), and blockchain into their operations. For instance, IoT devices can collect real-time data on insured assets, allowing insurers to offer usage-based insurance policies and adjust premiums based on individual behavior. 

Conclusion

As the insurance industry embraces digital transformation, APIs have emerged as a driving force behind this revolution. By enabling seamless data exchange, streamlining operations, enhancing customer experiences, fostering collaboration with insurtechs, and promoting innovation, APIs have become indispensable tools for insurance companies looking to thrive in a rapidly evolving market. 

As the technology continues to advance, insurance companies must embrace APIs as a strategic imperative, leveraging their potential to stay competitive, deliver value to customers, and capitalize on new business opportunities. The future of the insurance industry lies in harnessing the power of APIs to create a connected and agile ecosystem that meets the ever-changing demands of customers and the market. 

LenderDock Senior Product Manager Brandon Rodak contributed to this article.

July 27, 2023
Business Featured General Insurance

Exploring the depths of insurtech

The insurance industry is notorious for its overwhelming paperwork, complicated processes, and lack of customer involvement. However, the industry is undergoing substantial changes thanks to insurtech, an integration of insurance and technology. Insurtech companies are harnessing the power of technology to challenge conventional insurance methods and are introducing innovative solutions, better customer experiences, and enhanced operational effectiveness.

This article will examine how insurtech is changing the insurance industry, specifically in how insurance products are bought, sold, and managed. Insurtech achieves this through the use of digital distribution, tailored plans, data analytics, and automated claims processing, all of which are transforming the traditional insurance process.

The ascendancy of insurtech

Insurtech encompasses the fusion of cutting-edge technology and digital innovations within the insurance industry. It encompasses a wide range of technologies, including artificial intelligence (AI), machine learning, blockchain, and the Internet of Things (IoT). Insurtech companies leverage these advanced technologies to accelerate insurance procedures, elevate user interactions, and establish streamlined operational frameworks.

Enhancing customer interaction and digital delivery

The emergence of insurtech has revolutionized the distribution of insurance products. Rather than relying solely on brokers and agents, digital platforms have taken center stage, augmenting or even replacing these conventional channels. In the world of insurtech, visionary entrepreneurs are harnessing the power of online platforms and mobile applications, offering customers effortless and convenient access to a wide range of insurance products.

Insurtech companies are revolutionizing the insurance industry by providing customers with cutting-edge tools that facilitate easy quote comparisons and personalized policy recommendations. These advancements empower individuals to make well-informed decisions when selecting insurance options. Furthermore, insurtech firms leverage the power of social media and digital marketing strategies to directly engage with clients, fostering stronger relationships and ultimately enhancing customer satisfaction.

Tailored policies and individualized risk evaluation

Insurtech firms leverage cutting-edge analytics and AI-driven algorithms to provide customized insurance plans. By collecting data from a range of sources, including IoT devices, social media platforms, and telematics, these companies evaluate risks and create policies that align precisely with the specific needs of each customer.

Usage-based insurance (UBI) offers a method for determining insurance premiums by leveraging connected devices to assess individual driving habits. By analyzing data collected from these devices, UBI accurately gauges driving behavior, allowing for the calculation of suitable premiums. This innovative approach not only incentivizes responsible driving practices but also guarantees that policyholders are charged solely for the coverage they require, resulting in a customized and gratifying customer journey.

Data-driven underwriting and analytics

Insurtech firms leverage the power of data analytics and artificial intelligence (AI) to streamline the underwriting process. Through sophisticated algorithms, these companies can examine massive volumes of data, leading to improved risk evaluation and pricing models. As a result, insurtech startups can deliver rapid underwriting decisions and more competitive rates.

Furthermore, data analytics can play a crucial role in identifying patterns, uncovering fraudulent activities, and optimizing the processing of insurance claims. By embracing data analytics, insurtech companies can elevate their decision-making procedures and provide exceptional services to their clientele.

Enhancing customer experience through automated claims processing

Insurtech firms are leveraging AI, machine learning, and chatbot technologies to streamline the processing of insurance claims. By employing these advanced tools, they can expedite claims settlements, minimize the risk of human mistakes, and enhance accuracy. These systems have the ability to analyze claim data, assess damages, and determine compensation without relying on manual intervention. Additionally, companies are incorporating chatbots and virtual assistants to deliver prompt customer service, offer information, and guide users through the claims submission process. This automated approach to claims processing greatly improves client satisfaction and overall experience.

Synergistic alliances and cooperative endeavors

Insurtech firms are collaborating with traditional insurance companies to foster industry innovation. Recognizing the need to remain competitive, well-established insurers are embracing technology by forging partnerships with insurtech companies. These alliances enable insurers to leverage the expertise, adaptability, and customer-centric approach of their insurtech counterparts.

Such collaborations prove beneficial for both traditional insurers and insurtech startups. Traditional insurance companies can harness digital operations and introduce novel services to a broader customer base. Meanwhile, insurtech startups can capitalize on established insurers’ industry knowledge, resources, and distribution networks.

Exploring regulatory factors and challenges

The insurtech sector encounters regulatory obstacles and deliberations because of prevailing insurance regulations formulated to safeguard consumers and uphold equitable industry practices. Nevertheless, these regulations were established prior to the advent of insurtech and may not sufficiently tackle the distinct attributes of digital insurance platforms.

To address this, regulatory bodies must establish comprehensive frameworks that strike a balance between fostering innovation and ensuring consumer protection, while concurrently adapting to the evolving landscape. Furthermore, insurtech enterprises must prioritize data privacy and security within the insurance market by adhering to legislative requirements and implementing robust security measures. These endeavors are vital to uphold consumer trust and safeguard their sensitive information.

Balancing profitability and risk management with a customer-centric approach

While insurtech has the potential to bring about transformation, it’s crucial to assess whether it truly puts customers first. While customers stand to gain from this technology, its implementation is often driven by the strategic goals and profitability of insurance companies.

Insurance companies are leveraging insurtech to enhance their profitability and risk management strategies, even though they may present themselves as customer centric. Through the utilization of digital platforms and data analysis, insurers can more precisely assess risks, competitively price policies, and refine their underwriting procedures. While this can lead to improved operational efficiency and decreased losses, concerns arise regarding whether customer interests are prioritized or if insurers primarily aim to maximize profits.

It is crucial for customers to exercise caution and demand transparent communication, comprehensive information, fair treatment, and personalized engagement in their insurance dealings. Achieving a genuinely customer-focused insurtech industry necessitates striking a balance between the convenience offered by technology and the value of human interactions.

Protecting customer data and ensuring ownership rights

Utilizing customer data plays a crucial role in enabling insurtech companies to offer tailored policies and assess risks accurately. However, the acquisition of this data gives rise to privacy apprehensions since insurance companies accumulate significant amounts of personal details, including health records, driving habits, and lifestyle choices.

While leveraging data-driven insights can result in personalized coverage and potentially lower premiums, it also raises concerns about the ownership and control of customer data. It is essential for individuals to be vigilant about how their sensitive information is utilized, shared, and potentially exploited by insurance companies, as it could be employed for targeted marketing purposes or policy adjustments that primarily benefit the companies financially.

The impact of automation on human interaction: Finding the balance

Insurance procedures have now become more digital and automated, which can make the process faster and more convenient. However, this may lead to less direct interaction with human agents. Insurtech relies heavily on automated services like chatbots and claims processing, which reduces the need for human involvement.

While automation can make transactions faster, it can also result in impersonal experiences for customers. This means they may not have the ability to navigate complicated situations with empathy and understanding. For insurance companies to prioritize customer satisfaction, they need to find a balance between automation and human interaction. This will help policyholders feel supported and cared for during every step of their insurance journey.

Addressing exclusionary practices and prejudice in algorithmic decision-making

Algorithms and predictive models are important in Insurtech for assessing risk and determining premiums. However, it’s important to consider the potential for unintentional biases and discrimination that can occur in these algorithms. Insurers may inadvertently perpetuate societal prejudices or exclude certain groups based on algorithmic decisions.

It is important for insurtech companies to carefully monitor their algorithms to ensure that they are fair. Biases in algorithms can have a negative impact on the availability and cost of insurance products, which may unfairly disadvantage marginalized groups. Therefore, it is essential to avoid perpetuating any discriminatory practices.

Embracing transparency and regulation: A vital necessity

To give customers the best service in the insurtech industry, it’s important to be transparent and follow regulations. This means giving clear explanations about how data is used, privacy policies, any choices made by algorithms and potential conflicts of interest. These details help customers make informed decisions. Regulatory groups should make rules and systems that manage insurtech operations to protect customers and enforce ethical practices.

Final thoughts

Insurtech is revolutionizing the insurance industry by leveraging digital technology to enhance customer experiences. The use of digital distribution channels, data analytics, claims automation, personalized insurance, and better collaboration between traditional insurers and startups are among the new features introduced by insurtech.

Insurtech companies are encountering regulatory obstacles, they are spearheading transformative advancements in insurance procurement, sales, and administration. As technology advances and consumers demand more from the sector, the impact of insurtech will only increase, leading to a customer-centric insurance ecosystem that operates with enhanced efficiency.

July 19, 2023
Business Featured General Insurance

It is important for risk management and insurance organizations to continuously embrace innovation and have effective leadership in order to progress and succeed.

The insurance industry has undergone significant changes in recent years. The COVID-19 pandemic forced insurers to reconsider their traditional in-office business model and shift towards a more technology-driven and remote approach, with a focus on risk management.

While it’s good to see progress made by insurers over the last few years, there’s still much room for improvement. To that end, insurance leaders are addressing issues such as talent acquisition, risk education, and upgrading conventional risk transfer methods. Their aim is to push ahead with innovation.

Even though we have overcome the daily challenges posed by the pandemic, it is crucial for risk management and insurance firms to continue with innovative practices and effective leadership to stay relevant and competitive.

An innovative methodology

The objective is to ensure the long-term success of insurance companies. To achieve this, leaders can focus on these three specific areas.

Embracing the “predict and prevent” business model: A paradigm shift from “detect and repair”

Insurance companies have been using the detect and repair business model for over 300 years. This means that when a policyholder experiences a loss, the insurance provider will compensate them to cover the damages.

Since the frequency and severity of claims are increasing, it’s advisable to focus on preventing losses rather than dealing with them after they occur.

Swiss Re reported that insurance companies faced losses of $125 billion due to natural catastrophes in 2022, which is the fourth-highest recorded amount. Verisk and the American Property Casualty Insurance Association (APCIA) stated that insurers had an underwriting loss of $26.9 billion in 2022, the largest since 2011.

Insurers need to offer more feasible, economical, and reasonable products, as claim and repair expenses increase. To stay financially strong, insurers must switch to a predict and prevent business model that assists policyholders in preventing any loss from happening. This approach is now more crucial than ever.

Insurers who want to adopt a predict and prevent business model need to embrace innovative opportunities and tools that assist clients in building resilience. The good news is that insurtechs have a wealth of data, analytics, and tactics at their disposal to help insurers recognize and mitigate risks.

One option for risk management is to use telematics that can detect problems before they occur. This can help save on claims costs.

According to the National Association of Insurance Commissioners (NAIC), usage-based insurance (UBI) programs for automobile insurance utilize telematics to connect insurance premiums directly to the real-world performance of an individual vehicle or fleet. This enables insurers to establish premiums with greater precision.

According to NAIC’s findings, UBI programs incentivize policyholders to drive less and adopt safer driving practices, resulting in a 50% decrease in crash risk due to the technology.

To cope with the rising risk of extreme weather events, insurers can play a significant role by providing support and investing in resilience efforts. This can help society adapt to climate risk. In areas prone to disasters such as hurricanes and wildfires, it is crucial to improve public infrastructure and enforce more robust building codes.

The National Institute of Building Sciences (NIBS) has reported that investing in making existing facilities more resilient or building higher-quality construction projects can lead to potential benefits worth $11 for every $1 spent on upfront construction costs and long-term maintenance. This type of investment can also reduce the chances of devastating losses and provide increased safety.

According to a recent survey on Insurer Innovation by AM Best, there is a correlation between innovation that produces improved risk data and resilience. However, the survey found that insurers struggle to establish a reliable innovation process and often react in an unstructured manner.

According to AM Best, although insurer innovation scores have improved since the pandemic, 94% of the survey participants require improvement in transformative initiatives. Transformative initiatives are those that enhance customer engagement & experience, create value, help to make superior business models, or significantly improve growth opportunities.

Developing internal expertise and skills to foster innovation and streamline processes

Insurance companies need to change their mindset in order to successfully shift their business model. They should recognize that their business is no longer just focused on recovering losses, but on enhancing people’s safety and well-being.

What implications does this have for how insurers operate? They are already transforming their approach to prioritize discovering novel methods to deliver value and cut expenses, which involves integrating risk management into their offerings.

In addition to reducing insurance costs, they provide customers with valuable financial risk advice.

Insurance professionals can find support on their journey through organizations like The Institutes. This not-for-profit enterprise brings together stakeholders in risk management and insurance such as policymakers, insurers, trade organizations, insurtechs, and others with different viewpoints and expertise.

Their commitment involves educating consumers about resources to make better decisions, bringing attention to important issues for both consumers and insurers, and facilitating connections between various stakeholders to exchange knowledge. By building knowledge and skills, those in essential risk management and insurance roles can better handle future challenges and have the potential to become leaders in prediction and prevention.

Empowering consumers: Enhancing awareness, mitigating risks, and dispelling insurance misconceptions

Insurance is not a topic that many people feel comfortable discussing, except for those who work in the insurance industry. Although people may acknowledge that insurance safeguards financial stability, it is often overlooked how it can significantly impact the world’s economy.

Dr. Steven Weisbart, who is a former chief economist at the Insurance Information Institute (Triple-I) and a current nonresident scholar, has explained that the insurance industry is crucial to the development and advancement of any modern economy. According to him, insurance companies serve numerous purposes ranging from providing initial financial assistance and reducing risk to securing capital funds, supporting the supply chain, and collaborating in social policies.

According to Statista, U.S. insurers held almost $13 trillion under management in 2021. As significant investors, they frequently invest in private and municipal bonds that support the development and progress of communities, therefore acting as community builders.

The New York Insurance Association supports Weisbart’s assessment by stating that insurance companies invest the premiums they collect in state and municipal bonds, which help fund the construction of public projects like schools and roads. They also invest in corporate equities and bonds, providing businesses with the necessary capital for research, expansion, and other ventures.

Weisbart explains that insurers play a crucial role as facilitators of infrastructure and innovation. He points out that insurance has been instrumental in driving every industrial revolution and is therefore essential for the growth of an economy. Additionally, insurers also facilitate credit.

Insurers have a unique opportunity to educate the public due to their abundant resources and capabilities. They possess a wealth of data on various topics such as risk management, the economy, cybercrime, and climate risk. This data can be utilized not only for consumer protection but also for education. Insurers are well-positioned to inform individuals and companies about emerging risks and provide guidance on how to minimize them.

July 10, 2023
Featured General Insurance Press Release

LenderDock Inc., the leading provider of online Property and Casualty Insurance policy verification and automated lienholder process management services, is pleased to announce a broadened partnership with Georgia Farm Bureau Insurance.

“Enhancing the existing services for Georgia Farm further reinforces the all-digital strategy surrounding lienholder process automation and will provide their team with tools and resources to drive significant operational efficiencies and cost savings. They continue to be an exemplary and model partner,” said Frank Eubank, LenderDock’s CEO.

Having already implemented the use of LenderDock’s Notifi™ solution, Georgia Farm will add the use of both the Verifi™ and Correxion™ services.

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.

“We’re excited about leveraging the technology LenderDock utilizes to support our operational goals. Our partnership, in moving to the next level, will provide efficiencies and cost savings for all our stakeholders, but most importantly, our membership,” said Georgia Farm Bureau.

About Georgia Farm Bureau

Georgia Farm Bureau is a grassroots, membership-based federation whose purpose is to help farmers and advocate for Georgia’s agriculture industry. Since its inception in 1937, Georgia Farm Bureau has fulfilled that promise in a multitude of ways, including the establishment of the Georgia Farm Bureau Mutual Insurance Company.

Georgia Farm Bureau Insurance has grown over the years and now offers many types of coverage for farmers, business owners, individuals, and families across the state.

About LenderDock Inc.

LenderDock Inc., based in Salt Lake City, Utah, is the foremost provider of online services for verifying Property and Casualty Insurance policies and managing lien holder processes. Their cutting-edge platform, known as policy verification-as-a-service (VaaS), empowers banks, lenders, and other financial entities to instantly validate and rectify home and auto policy data through digital means.

July 5, 2023
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