Next, we will talk about technological advances within the world of insurance. We must mention that it is a unique issue considering that many people see the insurance industry as very resistant to change. This may be somewhat true, but at the same time it is not; It mostly depends on where you look at it from. Technology is currently the axis around which everything constantly revolves. It is difficult to see a personal or professional area without it being directly or indirectly related;
The effect of technology on insurance
The insurance industry is highly relevant and stands out from the rest of the industries thanks to the fact that it has an almost exclusive feature: it has been marketing the same product since its origins decades ago. This could lead us to think that it is a sector that is not advancing or changing in any way. However, it is the opposite of that. Today we can find various things that are changing within the insurance industry, both regionally and globally.
These insurers have mostly focused their efforts on approaching their agents or brokers as a way to ensure their preference. What they are looking for at all costs is that they do not go with other companies. This, throughout history, due to many reasons, has not been easy for them. However, thanks to new digital resources, companies have in their hands, for the first time, the beneficial and attractive means to achieve it. Developing in this way, various possibilities of access, personalization and contact; all this at reasonable costs.
To all this, we must add the change in customer behavior, habits and mentality. As a result of all this, we can find that insurers view the digital channel as a means to improve their tasks and tasks. They can also be more efficient and ultimately more profitable.
3 key changes of the digital age
- Insurtech: advantageous or the opposite? These are the dates when an application outside the usual financial industry has not yet appeared to change the business of insurance as we know it. However, there are companies and groups that claim to do so and insurance companies should not lose sight of this fact. For this reason, we believe that insurance companies that successfully integrate these new digital capabilities into their ongoing operations will reap huge benefits. Currently, multiple technologies have the power to achieve significant impacts such as Blockchain.
- Mobile: an excellent channel for after-sales service. At this point we can see another relevant change in the entire process of the insurance value chain. And not exclusively in the obvious that is the possibility of contracting insurance from a mobile device. Emphasizing the process of managing and reporting claims. Have an accident, report the location and accident of the company, take photos and send them, share the contact details of the other injured people, etc. They are common currencies in multiple countries around the world.
- Analytics: information as the foundation of transformation. Specifically, Analytics is the intensive use of huge volumes of data to evaluate behaviors, facts, realities, etc. And manage to create predictive knowledge to answer the smart questions that exist in the company, thus promoting action and aligned behaviors. Of course, everything we mentioned above is based on analytics; large volumes of data handled quickly in an intelligent way. We can also limit the following; a company’s distribution network and customer base can be greatly improved by obtaining very good quality data.
Blockchain in insurance companies
Based on the new Blockchain technology, smart contracts or ‘smart contracts’ have been created. Which allows establishing conditions so that the transactions are carried out. These conditions are verified by all participants in the blockchain to validate a transaction. We must mention that there are several applications that are viewed in the context of the insurance industry, but one of the paradigms would be to add policies as a Smart contract.
In this same sense, the conditions for carrying out a policy are incorporated into the aforementioned smart contract in the form of a tiny program as well. External factors are also established that will provide the necessary data to define compliance with the conditions of said contract. To mention an example; let’s think about introducing a smart contract associated with fire insurance for a residence. This would mean attaching a transaction to the Blockchain that involves the transfer of the agreed amount and conditioning the transfer to the fulfillment of certain conditions.
The Blockchain participants themselves will be able to directly verify compliance with the clauses of the Smart contract; in this we refer to: insurers, brokers, beneficiaries. Subsequently, once the network agrees that the conditions of the contract have been fulfilled, they will automatically execute the operation, crediting the agreed amount to the beneficiary. A scheme similar to this ensures greater transparency for the user, reduces operating expenses for insurers and makes the policy payment transaction much more efficient.
Technology and digital transformation in the insurance industry
We firmly believe that transformation is totally possible. It is also necessary, especially in a world where new trends and technologies emerge frequently, making changes faster and faster. At all times, business models must adapt to the new environment, customer demands and the possibilities that some companies currently have.
The opportunities that we can find are very varied. The decision of each company is easy to expose, but complicated to answer. We think that the second answer is not the most correct to guarantee the sustainability of a company. Be careful, you don’t necessarily have to risk everything, but the advancement of technology implies that, gradually or quickly, organizations adopt changes and take advantage of new technological stages if they intend to expand or maintain themselves.