February 20, 2024

Technology Innovation in Insurance Industry

When it comes to innovative technologies, the sector of insurance tends to be a late bloomer. However, new-age technology trends in the insurance industry are evolving. Nowadays only those rise to the top, who are quick in adaptation. So, insurers progressively join in with those modern companies that incorporate the latest technological innovations. They aim to enhance efficiency and customer experience. 2024 is likely to become a big year for the insurance industry's digital transformation. At the same time, many companies have to operate amid uncertainty on many fronts. Geopolitical crises, climate change, new pandemic threats, or a dodgy economy do not add up stability to the modern life.

Still, innovation in the insurance industry is inevitable. We will now look at how they are reshaping the current landscape in more detail.

Insurance Innovation: Micro-Insurance

Micro-insurance was recently introduced for people and households with low income or scanty savings. This group was overlooked before. However, now it is becoming an innovative and profitable product. Such insurances compensate for disasters like earthquakes and fires. They also deal with injuries, illnesses, and deaths. Modern technologies like blockchain make claim processing practical, straightforward, and quick. What is more, software solutions can even be developed platform-agnostic. It simplifies customer onboarding, behavior tracking, marketing, pricing, and data mining. At the same time, it minimizes costs for insurers. Micro-insurance can be risky when it goes about large volumes. So it’s reasonable to create scalable solutions to streamline the processes. Stfalcon will gladly take up such a task.

Insurance Innovation: Blockchain

Bitcoin was a pioneer in introducing blockchain technology. But now it has spread over various industries. Due to the decentralized platform, it has the best security worldwide. This fact allows companies to adopt this technology and save a significant amount of time and effort while keeping records, processing data, and underwriting through smart contracts. It becomes possible because all departments can simultaneously access information due to decentralization. More than that, risks can be evaluated with minimal effort, and chances for fraudulent claims are decreased. Some American and European companies are using blockchain already. Others should catch up with the implementation of this new technology in the insurance sector. The usage of blockchain is simple, but to implement it a company may face various challenges. Stfalcon is your trustworthy and experienced vendor to cope with them. Just keep this in mind if you are a player in this field.

Insurance Innovation: P2P Approach

P2P stands for the peer-to-peer model. It’s an approach when some group of relatives or friends create a cushion against the unexpected. The P2P approach is grounded on trust. A low-risk profile of each individual influences the combined risk of the whole group. So, it allows to process claims immediately whenever an incident happens. In case of insufficient coverage, the difference is covered by the reinsurer to meet the damages. If an accident has not happened, the unused means return to the group members. This fact makes P2P a popular innovation in the insurance sphere. It allows people to avoid the bureaucracy. However, to effectively set up and implement the P2P strategy technological tools are needed, online forms, payment methods, and blockchain solutions are just a few aspects to consider. Professional developers will solve all the tech issues for you. You may be sure, that adding a P2P model to your services or corporate policy will attract you many new customers at low operational costs.

Insurance Innovation: Robo-Advisors

Most companies nowadays look for ways and means to meet their customers’ needs around the clock. While this is almost impossible for a human workforce, Artificial Intelligence manifested in bots or robo-advisors successfully copes with the task. If properly deployed, they can effectively replace brokers and automate most duties. Without human intervention, virtual assistants can cope with routine or repetitive operations, collect client data, process queries underwrite new policies, and provide customer support. Other industries have already adopted robo-advisors as a standard practice. Yet, for the insurance sphere, it’s an innovation that can save costs and enhance customer experience. For this, it should be properly and timely implemented. You can rely on Stfalcon in the questions of development, deployment and setting a virtual assistant up for smooth and effective work.

Insurance Innovation: Gamification

Gamification is a modern-day innovation that is gaining traction in many industries. The insurance sphere adopts it as well. This powerful tool activates quick and intensive growth, there where the performance is low. That’s why it’s one of the leading IT trends in insurance. Gamification allows the creation of digital solutions that are client-centric and drive engagement. It in turn facilitates establishing closer relationships with clients and gaining a loyal base among them. Since that moment, you can reap the benefits. However, you should be aware of the risks involved in the process. Not every game can fit your business. That’s why it’s better to rely on professionals, who can prompt you on how to integrate gamification elements into your software. It should trigger users and be rewarding for all parties.

Insurance Innovation: IoT

Insurers cannot afford to process claims for weeks anymore. They risk falling behind their rivals in such cases. IoT (Internet of Things) is a game changer for businesses. It makes customers also expect rapid results. Not to lose out and to meet the client's expectations, you should adopt IoT. Connecting multifaceted devices (PCs, smartphones, printers, etc.) into a connected chain, the technology allows to avoid physical document exchange and consequent delays. Customers can now quickly upload images of the damaged property. Agents can review data right away and process the claims in a matter of minutes. New client onboarding, underwriting, and premiums adjustments also take just minutes. Collecting detailed data about your clients, allows you to quickly detect fraud and generate data-driven insights. A company can then provide customers with personalized offers. As a rule, it results in higher customer satisfaction levels and higher conversion rates. So, Stfalcon advises implementing IoT, if you haven’t done it yet and enjoy the benefits.

Insurance Innovation: Usage-Based Insurance

Digital technologies, unfortunately, do not guarantee faultless pricing modeling insurance. However, there is a secret ingredient – gathering more personalized data, for example, driving habits for auto insurance. The more dangerous the style of driving is, the higher should the premium be. Technically, you can track it by special event trackers installed on a driver’s auto. Based on the gathered data, you can tailor a unique yet fair pricing solution for your client. UBI implementation allows companies to reduce claim costs, and enhance customer loyalty. It sometimes even helps their clients become more responsible on the road.

Insurance Innovation: Big Data and Machine Learning

Big Data is revolutionizing the world of insurance services. Internally and externally multiple pools of data are available. If used for AI-enhanced predictive models, they can help detect profitable patterns and predict trends to follow. Big data and machine learning are widely used nowadays for underwriting, risk assessment, pricing, client behavior studying, and much more.

AI bots can be useful in customer service, marketing, and for fraud detection. If you want to skim the cream off, consult Stfalcon on how to benefit from it and invest in this trend proactively.

Top Insurance Industry Trends That Are Here to Stay

Some trends come and pass, but some come, stay, and develop. This section is about the tech trends in insurance that are here to stay for the coming years.

Embracing of Gen AI Gaining Momentum

A McKinsey study states that by 2030 AI will transform all the aspects of the insurance industry.

Intelligent machines, deep-learning algorithms, and bio-sensors are the future that is already here. They shape the present-day reality. A very important shift from ‘paying for damage’ to ‘preventing damage’ is going on right now. Though it might seem slow and running in the background, the concurrent development of AI and IoT in public space is going to make the present-day way of claim processing outdated.

So, to stay on the wave in the insurance business you should be ready to adopt cognitive technologies and create strategies. It will prepare your company for data usage and distribution from connected devices. Consider the ways to define risks in the eon of wearables. Think also about your workforce upskilling to cope with the tasks and challenges they are going to face.

Low-Code Development for Faster Go-to-market

Low-code development offers many benefits in terms of transformation and digital innovation in insurance. This robust solution is gaining momentum. It enhances customer experience, internal operations, and processes thus boosting operational efficiency. What is more, low code development promises potential savings of up to 70%. A 3-day deployment timeframe, possible due to low code, contrasts unambiguously with two-year processes earlier. No wonder, the adoption of low-code has increased among various industries and businesses. This trend is projected to continue. The forecasts state that in 2024 low code development will exceed 65% of app creation activity. The market of low-code platforms has already reached a staggering $15B. It is predicted to quadruplicate in the next 5 years.

Deploying apps without writing a line of code offers the following advantages:

• Faster innovation. Insurers can launch new products and add up features at lightning speed. It allows them to stay ahead of market demands.
• Cost reduction. No-code platforms eliminate expensive and cumbersome legacy systems. It frees up resources for the critical areas that require attention.
• Improved efficiency. Streamlined workflows and process automation boost productivity. So, insurers can focus on fraud detection, risk modeling, and other higher-value tasks.
• Enhanced customer service. More personalized policies and faster claims processing, possible due to low-code platforms, result in happier and more loyal clients.

Going a step away from efficiency, democracy in development should also be mentioned. Citizen developers get the chance to contribute to the platform development. It fosters diversity of talent and supplements the innovation process with fresh perspectives.

Embracing the low-code technology innovation in the insurance industry, an insurer should keep in mind security as a top concern. Sensitive data and systems should be protected by all means.

Embedded Insurance Gaining More Momentum

This trend is reshaping the industry and promises a $900 billion market opportunity by 2040. The essence is that insurance and non-insurance companies partner at the point of sale. A good example is car manufacturers and retail businesses that adopt UBI to meet individual customer needs. Embedded innovation insurance offers protection exactly where and when it’s needed. If integrated into the business models in e-commerce, logistics, and healthcare, it can unlock fresh revenue streams both for businesses and insurers. The latters can reach untapped client groups and offer them coverage based on data insights. Businesses in their turn can get revenue as commissions for such add-on services. However, to offer leading-edge solutions, insurers should also partner with developers. IT specialists are able to implement technology trends and analytic tools. It will help extract valuable insights from embedded insurance data for informed decision-making and strategy development. Cloud computing, IoT, AI, ML, blockchain, and API are the technologies that facilitate and streamline the embedded insurance process.

Brace for Blockchain Disruption

The insurance sphere is a tasty morsel for fraudsters, especially tech-savvy. So, as an insurer, you should take care to prevent fraud and potential risks. Blockchain technology has proven to be the best in the world by now to protect data and all operations. Smart contracts technology and media records encryption make all the transactions and processes secure, efficient, and transparent for all the parties.

Big players have already adopted blockchain. Global insurers' collaboration put forward the Blockchain Insurance Industry Initiative. So, if you are not in the league, but a medium or a small player in the field of this business, you must follow this trend as well. Looks like it’s going to disrupt the industry landscape in the very near time.

Stfalcon's Approach to Insurance Industry Innovation

Insurers deal with highly sensitive client data. Since Stfalcon has extensive experience with healthcare solutions, we know first-hand what security measures should be and how to protect our software from cyber-attacks. We work with blockchain among all the other technologies and can help you implement it.

We also perform regular security audits of the products we maintain or on request of our clients. So, if we develop an innovative solution for you, you may be sure your system will be properly protected. You can also turn to our experts for your current solution upgrade or scaling following all the modern technical trends. Our developers can help you with data transfer from your current solution to your new one. We will consider and take care of all the measures of data security and safety.

We make all our solutions client-centric. So we know how to gather information about the users, gain insights from it, and make service personalized for every client. ML, IoT, and AI technologies are the ones we efficiently work with.

Stfalcon is known to transform the standard user experience into an intuitive one. We keep the users as our complete focus and bring to life human-centered designs. So developing your insurance app with Stfalcon you may be sure it will appeal to your users.

Our motto is to go with the tides of all the innovations and to choose the best and most effective technologies to implement in our solutions. It helps us be ranked high by all our clients and exceed their expectations.

FAQ about Innovation Approaches in Insurance

How is technology reshaping the insurance sector?

Technological advances and innovations allow insurers to provide their clients with a more personalized and client-centric service. They also achieve better operational efficiency and higher ROI due to big data, AI, and ML.

What are the prevailing developments and trends in the insurance industry right now?

Certain IT trends are industry-wide. We can mention here blockchain, AI, and ML as the leading-edge trends. However, some innovations touch upon only some specific sectors. It often depends on various factors, such as social, economic, and geopolitical circumstances. Embedded insurance based on personalized policies and analytics for more business-driving insights is going to disrupt the industry in 2024 and beyond. As we mentioned above by 2040, it's predicted to reach the overwhelming $900 billion market opportunity.

What are the major obstacles and difficulties that the insurance industry is currently grappling with?

Unfortunately, there are still many companies that lack the awareness and resources to create digital solutions that meet the high standards of the present-day market. In the world of rapid transformations, customer expectations also change rapidly. So you need always to be up-to-date to preserve loyalty among your clients. Some insurers also suffer from economic challenges and regulations introduced by the governments.

Final Thoughts

In the present day of uncertainties, natural disasters, and pandemics, insurance itself has become a trend. To become popular and trustworthy you should be tech-advanced, have a flexible product range, and go with the tides. All these will help you meet the requirements and expectations of your clients. If you want to rank first in the market, you need to adopt the most innovative strategies and technology trends in insurance. It will help you automate your routine and processes and provide more personalized and cutting-edge products to your clients along with secure digital solutions.

Stfalcon is always ready to support you on your way of becoming an industry leader. We have almost 15 years of experience behind our backs. Our expertise in all the tech innovations and trends that rule the digital industry market is extensive. So, we can help you implement any digital solution you have in mind. It may be blockchain with its smart contracts or robo-advisor development for better customer service. We can help you gather and process data, introduce gamification, or implement whatever idea.

If you have a software solution or infrastructure, our experts can make a technical audit of it. We advise how to enhance, renovate, or scale up software solutions. If you are a player in the insurance field, contact us to discuss how to bring your business to a new level.