“Insurance distribution approaches have been radically changed throughout the majority of markets and segments, with the consolidation of digital distribution and price comparison websites” – according to Juniper Research – “While many insurers have moved online and diversified their distribution channels through price comparison websites, the claims reporting & management processes are broadly the same as they were 20-30 years ago”.
According to the British consulting firm, insurance premiums generated by insurtech could reach $406 billion by 2023, compared to the current $187 billion. It is written in the recently published report “Insurtech: Cost Savings, Insurer Readiness & Market Forecasts 2018-2023”, focused on the forecasts for the insurtech sector in the next 5 years, also verifying market dynamics, new players, technologies to look at, strategies of the big companies.
Insurtech refers to technology-driven innovation in the insurance industry, which has an impact on traditional business models and challenges one of the richest and least digitalized industries worldwide, hitherto dominated by corporate giants. Sharing economy, blockchain, cyber security, Internet of Things, Artificial Intelligence are some of the challenges faced by traditional insurance companies and are driven by startups, against whom the incumbent companies have now adopted a cooperative attitude.
A technology expected to be particularly disruptive by Juniper Research in the next 5 years is Artificial Intelligence, that is going to be extensively exploited by the vast majority of insurers especially for claims management.
“Automated claims data processing is too big a gain for insurers to ignore,” writes Juniper, predicting that “in the non-life, health, life, and motor industries, annual cost savings will exceed $1.2 billion by 2023, five-fold compared to 2018”.
For the insurance industry (as well as for other industries), the importance of artificial intelligence has become quite evident and has given rise to great promises to the advantage of both the user-customer and the Companies.
Claims management and settlement, one of the most critical aspects for the insurance industry to date, is certainly one of the areas where many benefits will be experienced: artificial intelligence promotes speed and efficiency, eliminating bureaucratic delays, providing certainty. Online front-end interfaces and virtual claims adjusters will make the settlement and payment of claims following an accident more efficient, while reducing the risk of fraud. Just an example among many, the startup Lemonade that succeeded in managing a claim in 3 seconds.
The only “unpleasant” aspect of this transition is the loss of workplaces, McKinsey predicts a 70 to 90 percent reduction in staff dedicated by Companies to claim management. A change that has already begun: Fukoku was the first insurance company worldwide to have publicly fired 34 employees in 2017 to replace them with AI software.All rights reserved