This article was written by Robin Smith, co-founder and CEO of WeGoLook.
With computing power doubling every 18 months and new technology being introduced on a seemingly daily basis, all industries need to embrace innovation as a way to increase efficiency, while at the same time satisfying ever-challenging customer demand. Insurance is no exception, but it is an industry that has historically been reluctant to leverage new technology and changes, no matter how alluring.
While this, to an extent, can be explained away by maintaining that the barriers to entry – predominantly time-consuming regulations and high costs – are too great, fintech (financial technology) is being increasingly viewed as a necessary way to evolve a historically paper-based industry and modernize it to appeal to a new younger generation of consumers and business owners alike.
Indeed, modern fintech can be seen as a way of offering customers a new generation of services, while at the same time making it easier to file claims and collect data, while at the same time evaluate risk.
From an insurance industry viewpoint, this move towards embracing fintech can be combined with a society-wide trend away from owning assets to renting them, as well as a business management trend towards the integration of a more flexible workforce and a gig economy. For example, mobile technology-delivered just-in-time insurance, underwritten almost immediately, obviously holds massive potential.
There are a number of ways that fintech can impact the insurance industry. Increasingly innovative mobile technology can help from both a consumer as well as an insurance company perspective. Indeed, mobile technology, coupled with the understanding and personalization of big data will result in a virtual paradigm shift in how risk is assessed and coverage offered.
Not only that, but an increasingly flexible workforce, along with the rise of a gig economy, will change both the makeup of the workforce and be an evolution away from a historically paper-based industry.
The insurance industry continues to streamline and adapt to consumer needs by implementing an increasingly flexible workforce. One of the main ways of ensuring this, while at the same time implementing such a mobile technology-driven just-in-time delivery philosophy, is embracing a gig economy. With such an economy, temporary, independent workers are contracted for short-term appointments.
Consequently, in terms of the insurance industry, independent workers utilize their spare time to complete short-term tasks, such as taking photographs or verifying the existence of an asset – such as a car, document or property – in their own geographical location.
In much the same way as Uber works, trained personnel are contracted on a very short-term basis to complete a variety of asset verification tasks utilizing mobile technology and the Internet.
As a result, such independent workers can be used to either augment or completely replace employees in the field, complete tasks quicker at a lower cost than full-time employees, and store all captured data in the same location and format – from documents and photographs to video.
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In addition, insurers can utilize such internet-connected technology as smartphones and wearable Android OS watches to study personal behavioral patterns of consumers in order to personalize their insurance needs, creating new data sets specific to their lives instead of basing risk assessment and pricing on probabilities and industry generalities.
Health insurance premiums, for example, can be reduced by consumers who can demonstrate healthy choices, monitored by such mobile technology. Another example is utilizing telecommunications devices to monitor an individual’s driving behaviors in order to personalize, and hopefully reduce, automobile insurance costs.
Mobile technology is an innovation when it comes to data collection and claims processing. For example, smartphones with a suitable insurance app installed, can already be used to initiate an accident claim from the site of the incident, complete with photographs of the damage sustained to the vehicles, taken by the phone’s own camera.
The completed claim can then be transmitted direct to the insurance company without delay or the need for a third party getting involved.
Innovative smartphone insurance apps are one way to make an insurance agent’s life easier and an insurance company’s data, claims and document management more efficient and cost-effective, with fewer mistakes. Indeed, data collection has never been easier, in many cases involving just ‘point-and-click’ technology.
In addition, as the use of technology and big data continues to increase in the insurance industry, it can create further opportunities for growth and facilitate a competitive edge in the marketplace.
With millennials, for example, their chosen mode of communication is most likely not a voice phone call, but social media, mobile technology and smart phone apps. Utilizing such non-traditional communications opportunities can provide access to a demographic that is notoriously under-insured.
The bottom line is that mobile technology, and indeed non-traditional communications and societal innovations, can be utilized to add efficiency and competitiveness to the insurance industry. On the flip side, without embracing such technologies and being willing to progress, the insurance industry runs the considerable risk of being left behind as work force trends and consumers tastes evolve.