A motorist wants to file an insurance claim, perhaps after an unfortunate accident on the highway. Now, instead of rummaging through the dashboard for his insurance details or filling an elaborate form online, he can use a smartphone app to file his claim effortlessly.
The insurance industry is gradually adopting modern technologies to communicate, engage with, and add value to its customers. Until recently, insurers had minimal interaction points to connect with their clientele. But technological intervention has transformed the scenario significantly, with a majority of insurance providers offering smart solutions like mobile apps for policyholders. Through these apps, customers can file claims, manage policies, access digital IDs, seek voice assistance, and also gain incentives. Consequently, the pay-as-you-go model is gaining popularity in the insurance sector.
In today’s world, auto insurance companies, in particular, are progressively leveraging telematics—a combination of telecommunication and informatics—as an effective engagement channel, to mine rich and varied consumer data that can drive personalized products and services. This trend is driven primarily by customers’ increasing willingness to share information, primarily due to changes in general consumer behavior and also in exchange for incentives offered by companies. For instance, an insurance company in Australia uses a car-mounted telematics device that monitors drivers’ speed, acceleration, braking, and time, before transferring the data through a wireless Machine-to-Machine (M2M) network. It also measures the driver’s attention to safety and offers feedback on their driving pattern. The company then rewards customers based on these criteria with lower insurance premiums or other benefits with reward updates reflected on drivers’ apps in real-time.
In addition, many US and UK insurance providers have partnered with automobile manufacturers to offer built-in insurance telematics, in order to establish a direct connect between companies and their consumers, enabling contextualization. With progressively cheaper technology ensuring that the global device market is on the upswing, this ensures a win-win situation for both insurer and customer. In fact, recent estimates suggest that insurance telematics could drive 100 million policies and generate more than $68 billion in premiums by 2020.
In the present context, insurers are also gaining insights on their customers and customizing policies to suit their preferences, by implementing big data analytics and social media strategies. For example, a company offering home insurance to a customer can analyze its customers’ posts or tweets and suggest relevant insurance cover for life or travel, based specifically on their requirements.
Furthermore, companies are deploying telematics and big data to reduce risk and aid fraud detection. As telematics provides data on the location of products and their usage, insurers can ascertain the veracity of claims. Insurers can also gather data and assess business risks, based on their customers’ behavioral patterns.
Will technology revolutionize the insurance industry, in a manner similar to other sectors, such as banking and online trading? Share your view with us in the comments section below.