Around 62% of insurance executives believe that the industry is keeping up with technological advancement. More than 95% think that the value of advanced analytics as an essential innovation in the insurance industry will increase over the next 3 years. These numbers and other latest statistics prove that InsurTech is currently on the rise.
The rapid development of new technologies and significant market changes imply opportunities for businesses that keep up with insurance industry trends. Tapping into InsurTech innovations, they get a chance to win customers and outpace slower competitors.
But what are the current trends in the insurance industry you need to follow? Read our new article to know the most valuable InsurTech trends for 2023.
10 InsurTech Trends to Define the Industry in 2023
Digital transformation rapidly embraces the insurance industry, as more and more businesses rely on software solutions to automate workflows, manage data, and improve customer experience. Here are the 10 insurance technologies that gain momentum in 2022.
1. Robotic Process Automation
Robotic process automation (RPA) helps InsurTech companies save time on routine operations. Those are rule-based bots handling repetitive work. Here are the most common things RPA can do.
By optimizing time management, RPA improves business efficiency. For example, the McKinsey report shows that robotic process automation return on investment in the first year ranges between 30% and 200%.
2. Application connectivity
Connectivity allows several InsurTech apps to work as a single system. Hence, seamless information exchange between insurance technology apps makes InsurTech software more efficient and convenient in use.
A vivid example of connectivity in insurance technology is Axitech. It is a collision management system that includes two separate applications. A user can employ the driver app to record the essential information about the collision. They can take photos of a damaged car or upload police reports about the car accident. After that, a vehicle owner uses the message center of the insurance software to deliver such data to the underwriter. Check the full case study to know more about how this insurance software solution was developed.
3. Optical Character Recognition
Rule-based or AI-driven optical character recognition tools automate work with documentation. The algorithms of such tools scan a variety of documents in multiple formats. They confirm the validity of such documents or structure and distribute them across different categories. Therefore, such InsurTech solutions help underwriters save time and effort.
4. Personalized Pricing
InsurTech companies use a broad range of customer records to ensure personalized pricing. Data from various connected wearables or social media makes them understand a target audience much better. Traditionally, InsurTech companies were focused on customer segmentation. However, the times have changed. Modern insurance data analytics enables InsurTech businesses to develop approaches tailored to the needs of individual clients. Studies show that companies that enable individual personalization of their prices and services increase revenue per customer by 60% and customer retention by 81%.
5. Fraud detection tools
Fraud detection Insurance software solutions analyze and compare data sets to help insurance agents detect fraud. This innovation in the insurance industry processes suspicious claims and claim-related information to determine deception. Check the list of issues that can be detected by such insurance software.
As more and more businesses recognize the potential of fraud detection software, the market of such solutions is expected to grow at a rate of 15.4% from 2021 to 2028.
6. Chatbots in insurance
Chatbots automate primary communication with clients. Such InsurTech software solutions use machine learning or rule-based algorithms to respond to client requests. Hence, you can ensure a better user experience without hiring dozens of customer support specialists. The growing quality of chatbots makes them one of the most popular insurance tech trends. In recent years, 44% of InsurTech users were successfully using chatbots to get information on the offered services.
7. Predictive analytics
Analytical tools are an integral part of digital transformation in insurance. They use statistical modeling, AI, or rule-based algorithms to process significant data loads and make predictions. Predictive insurance technologies analyze customer preferences and demands to personalize services. In addition, underwriters use such solutions to predict the risk of collisions or other accidents and make rough projections on insurance payouts.
8. Blockchain-based security
As one of the hottest technological innovations, Blockchain also takes a valuable place among insurance tech trends. It fortifies database security by storing all essential data records, such as claims and payment information, in separate blocks of a single chain. Once someone attempts to illegally retrieve or replace the information in such a block, the entire chain alters completely, which is easy to detect.
9. Telematics insurance
Telematics are used to track the policyholder’s driving behavior. Such insurance software solutions run a telematics box installed into a vehicle. This device uses a GPS system, motion sensors, and analytical tools. They enable it to track speed, location, time, aspects of crash accidents, and other driving data that matters for collision claims.
They have already become one of the popular car insurance industry trends. Here are some statistical facts that prove it. Therefore, the evident potential of telematics solutions makes them one of the most rapidly growing segments of the InsurTech market.
10. Cloud computing
Many InsurTech companies use cloud, hybrid cloud, or serverless solutions to ensure higher scalability of their InsurTech software. Another important benefit of cloud computing in insurance tech is that it allows businesses to reduce costs. This is because they do not need to develop sophisticated infrastructures or pay for idle cloud capacities. Hence, the use of the software provided by the world's dominant cloud platforms, such as AWS, GCP , and Microsoft Azure , is one of the most valuable insurance industry trends for 2023.
Follow the essential technology trends in the insurance industry to get a competitive advantage over other businesses. You may rely on ready solutions offered by InsurTech providers. However, custom development of insurance technologies allows you to get a unique product tailored to the most specific needs of your business.
Note that software solutions for the insurance industry require solid technical expertise. Hence, if you feel insecure about your technical capacities, outsourcing insurance innovation development is the best choice.
Binariks extends a helping hand to InsurTech companies. We have experience in developing software solutions for the InsurTech industry. Check out our collision management platform project and other case studies from our portfolio to know more about how we work.
Contact us to discuss the possibilities of cooperation that will help you leverage technology trends in the insurance industry.