New decade, new possibilities 2020 begins with a few challenges. It should be an exciting year for the insurance industry as well: transition and change are in the air. Today we will share our top 5 trends for the new year.
- Individualization and AI in the customer service of the future
"Faster, further, higher." While this saying once applied in particular to the capital market, it is becoming more and more relevant to the insurance industry. While on the one hand the contract conclusion, maintenance and termination of existing insurance contracts is becoming increasingly easier in 2020, the needs of customers to replace bulky continuing contracts with flexible, independent and individual contract solutions are growing simultaneously. Artificial intelligence and machine learning are playing an increasingly greater role as well, in particular in customer service in the form of chatbots and the subsequent processing and analysis of data. This individualization and mechanization of the insurance industry will have long-lasting effects on previous work processes: The classic broker support will continue to exist within the scope of consultation provided by a person of trust. Administrative tasks will nevertheless be increasingly pushed back by the possibilities of digitalization and be completely replaced sometime.
- Innovations for efficient claims management gain ground
After Lemonade reported that the InsurTech pays out a claim after a three-second inspection and analysis and therefore an innovative feature for claim processing has been created, the German insurance companies are now under pressure. In the future, chatbots and other AI-based systems will help to quickly and reliably take over settlements for claims. Only for complex cases should the damage not be automatically settled. The damage prevention should be expanded and the costs reduced in the long-term - through the use of big data and AI, as well as the reading of wearables. Predictive Analytics will establish itself more and more and the functional mechanisms in the entire industry will change permanently.
- Climate change and sustainability as game changers in the insurance industry
The climate change has become a part of the daily agenda for insurance companies as well. After the typhoon Haiyan caused billions of dollars in damage in southeast Asia last year, there is a bush fire in Australia that has destroyed an area as big as all Benelux countries put together and is now also partially seen as a direct consequence of the climate change. These natural catastrophes affect the behavior of the insurance companies for claims in existing contracts as well as the risk assessment for new contracts. In addition to the higher amounts of damage that insurance companies anticipate, the insurance totals that have to be reinsured are getting bigger and bigger.
- Fraud prevention for insurance claims
Cases of insurance fraud cost German insurance companies up to five billion Euros every year. That is why AI should now help to detect these automatically and submit it to the claim handler for further inspection. Special attention is paid to recurring patterns like the same payout accounts and assessors, similar damage claims and other connections between different claims to detect patterns of fraud. Fraud specialists are still responsible for the ultimate clarification. Nevertheless, it will show how effective fraud prevention is. Maybe an AI review will soon be done for damage under 500 Euros as well.
- Mega platforms – one for all, instead of every man for himself
What began as a digital marketplace and comparison platform with Check24 and Verivox and caused a stir in the industry in 2018 with the launch of FRIDAY as a digital insurance platform is nothing new on the Asian market. WeChat, Alibaba and Meituan-Dianping are busy with each other on the market there: instead of creating individual digital ecosystems for every insurance company and service provider, the super app model is dominating the market there. Insurance companies, banking transactions, recreational time, social contacts or delivery services can be controlled through a single app. These all-in-one lifestyle apps are in line with modern times: digital help around the clock in the form of administration, completion and termination of all types of services, immediately and directly. European and American insurance companies will have to take this next logical step as well if they want to continue to present themselves as a reliable partner for customers who are becoming increasingly flexible.
2020 will demonstrate if these trends will prevail and establish future-oriented concentrations in the industry. Now there is just one question: will the insurance companies take on the role of the draft horse or the lemming? Stay tuned!