The past year has been perhaps one of the most unpredictable in decades. From calamitous climate events to the COVID-19 pandemic and the resulting economic fallout, it has been a year centred around survival and adaptation.
The insurance industry experienced arguably the most dramatic shift in 2020—digitizing operations to enable remote working, processing a significantly larger number of claims, and adhering to continuously evolving regulatory requirements. And despite all this change, insurers seem to know that this is only the beginning.
In order to thrive in 2021 and beyond, insurance providers must continue to drive their digital transformation initiatives and accelerate the integration of new-age technologies into their operations.
Top 3 Tech Trends for Insurers to Watch in 2021
- Low Code-driven Digital Transformation
According to Gartner, by 2024, “low-code application development will be responsible for more than 65 percent of application development activity.” With low code on the rise, insurers would be remiss to overlook its value.
Low code enables insurance companies to develop applications rapidly, with little to no dependence on their IT team or external vendors, and automate their end-to-end processes. Through last mile automation, insurers can extend their tech ecosystem—building easy-to-use self-service portals and dashboards for their stakeholders.
Additionally, insurance companies can decouple their legacy systems and freely integrate with third-party systems and new-age technologies.
- Artificial Intelligence, Machine Learning, and Analytics
Gartner predicts that by the end of 2024, 75% of enterprises are projected to shift from piloting to operationalizing artificial intelligence (AI), driving a 5x increase in streaming data and analytics infrastructure.
AI, machine learning (ML), and analytics are perhaps the most revolutionary technologies to be leveraged in the insurance sector. When used together, AI, ML, and analytics create a robust, intelligent framework for insurance processes, especially fraud identification, risk mitigation, underwriting, and claims management.
An AI-driven system can act a self-learning assistant—suggesting the next best action for underwriting policies and processing claims based on analysis of past data and customer patterns. In an increasingly unpredictable market, AI, ML, and analytics empower insurers with the information to make smart, secure, and cost-effective decisions.
- Big Data
In October 2011, McKinsey asked, “Are you ready for the era of ‘big data’?” And it seems that nearly a decade later, the era of big data is continuing strong.
Now, however, the scope of big data has shifted—from revolving largely around customer data being mined online to powering the Internet of Things and social listening, among other things.
Going into 2021, insurers can leverage big data to create accurate risk profiles of their customers based on social media and web data. Going a step further, insurance providers can now tap into data from wearable technologies, such as the Apple Watch or Fitbit, and event data recorders, often found in cars, to gauge customer behaviours, inform their underwriting decisions, and manage risk.
Expecting the Unexpected in 2021
“With 2021, we open a new chapter in which one thing is certain: Change and uncertainty will remain constants in customers’ lives. Insurers must therefore remain vigilant in investing in the digital products, services, and capabilities that customers expect.” – Jeffery Williams, Senior Analyst, Forrester Blogs
If 2020 has taught us anything, it’s to expect the unexpected and be prepared for anything. As insurance companies strive to stay competitive in 2021, by rapidly adapting to the changing environment, accelerating digitization efforts, and adopting new-age technologies, the most important takeaway is the importance of continuous innovation, flexibility, and agility.
We know now that the right tools and a future-facing approach can mean the difference between surviving and thriving.