Now more than ever, we’re experiencing the acceleration of the digital age. According to a senior partner at McKinsey & Company, the current economic and political crisis following the coronavirus outbreak has forced many companies into a massive experiment to see how fast and flexible they can be. After looking at how insurtechs and insurers are helping to fight the pandemic, bringing innovation to the insurance sector and impacting insurance markets’ regulatory practices through technology. We’ll explore a little further and look at how other companies are transforming through the use of these technologies.
As technology continues to transform the insurance sector, other industries are too looking to adapt and change; however, all companies share common goals to scale, grow, and profit. Let’s look at some of the technology and innovation relevant to the insurance industry and how it’s becoming applicable in other sectors too.
Technology and innovation in the insurance industry
Multiple technological advances underpin many Insurtech developments, and we’ve listed several of them below.
- Mobile technology and apps
Smartphones and access to the internet have led to the development of applications (apps), allowing companies to target larger audiences. Mobile technology is often designed to roll out the latest features to its users to make their lives easier whilst encouraging them to interact with the company. Apps have the ability to send push notifications to users on anything from insurance coverage to reminding them about payments. Mobile technology has helped transform banking companies, retail, travel, real estate, and most other sectors you can think of, making information more accessible in an interactive and engaging way. Smartphones with an internet connection allow the population to browse online resources and complete transactions. Many companies recognise the importance of mobile technology and have optimised their online resources to reach more people. Property investment company RWinvest has a range of mobile-friendly guides available to download straight to your device, and you can call an agent should you wish to invest.
- Artificial intelligence (AI), algorithms and automated-advice
AI is used to give computer programmes logical functions like learning and problem-solving. AI has been used throughout the financial sector for trading. Algorithms are also part of machine learning, where a set of steps will be put in place for the computer programme to achieve. To place a trade, the algorithm would follow a set of conditional instructions at a speed much faster than a human trader could. Algorithms are used for many businesses, from stocks and shares to social media platforms and route navigation systems. Automated-advice is also becoming a large part of online investment and savings platforms. In the insurance sector, it’s been used for investment management to provide automated guidance on making financial decisions. Automated-advice is calculated through algorithms to assist people who may not have access to financial advice and cannot meet face to face with a financial advisor.
- Smart contracts
Smart contracts are written as programming code to be transferred via a computer rather than as a legibly printed document. This form of technology allows companies to trade and do business with anyone, anywhere in the world, providing there is an internet connection. This removes the need for negotiations to take place through an intermediary. These types of contracts sometimes use distributed ledger technology or blockchains, referred to as cryptocurrency. One of the biggest blockchain platforms is Ethereum, used by companies worldwide for its smart contract functionality.