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What’s the Next Big Thing in the Insurance Sector in 2019?
The rising competition in the insurance industry is leading the focus on cost optimization and customer retention. Let’s read what opportunities the latest technology will offer to the insurance industry in the upcoming years.
The global insurance market is undergoing a transformation to “digital-first” business models, which are unlocking potential opportunities for the insurers to survive in the competitive market. Insurers are saying goodbye to the traditional operating practices and welcoming the innovative technologies with enthusiasm to become more customer-centric, improve pricing and enhance operational efficiency.
If you look back in 2018, the insurance industry has tremendously shifted towards automation and is growing at a faster pace as all the repetitive activities have been excluded from their everyday work routine.
So, according to researchers, 2019 will have a positive impact on the insurance industry as the latest technologies are likely to offer more perspective and unique opportunities; however, that doesn’t mean it will lift all boats equally.
Latest insurance industry trends-2019
1. Insurers will move to cloud-
Cloud has always been in debate in the insurance industry, but now this argument has come to an end as today you will find 7 out of 10 carriers using the cloud for their insurance business. It has become an inevitable part of their technical background and business tactics.
Earlier, cloud computing was only acknowledged for cost savings, but the next version for adopting cloud will likely be determined for other strategic benefits as well such as flexibility, speed, and scalability. Many insurance CIOs, who were under extreme pressure to deliver digital services are planning to develop cloud-based applications to enhance their speed of deployments.
According to various reports’ forecast, it is expected that in 2019, global cloud computing market including cloud platforms, business services, and SaaS, will exceed $200 billion as cloud providers will advance their capabilities to offer a better and industry-specific solution to their clients.
Surprised to see Blockchain and cryptocurrency in the list? Well, Blockchain is often defined as “distributed ledger”. In Blockchain, all the data is spilled and stored across an extensive network, where no entity can acquire the complete record easily as it decentralizes all the data, which becomes nearly impossible to hack. Thus, Blockchain is reputed as the best method for data security.
We all are aware of the fact that the insurance industry is all about data. Insurers have all the details of their client base including personal information, bank account details, etc. The insurance businesses cannot afford any type of data theft or breach as it may cost them millions along with the high chances of reputation damage.
Blockchain can be of great help to the insurers to secure their clients’ data and stay stress-free. According to 2019 forecast, insurers will get more centralized information and the focus on data sovereignty will increase. The insurance industry will also witness an increase in interoperability between Blockchain and disputed ledger technologies, allowing insurers to evaluate new insurance risk and improving the feasibility of existing lines of risk.
3. Big Data-
Well, the name itself describes the meaning of this technology. It includes a massive amount of data of all the people who have any digital connection. Being a huge platform for data management, you will find structured as well as unstructured data, which is gathered from various resources.
However, insurers usually utilize the structured data that include consumer information to gain crucial insights for calculating risk on each policy, identifying product and sales prospects, and detecting frauds. But if we conclude it in a very precise way, Big data has more potential to streamline the heaps of data in the insurance business accurately.
Numerous studies have shown that 2019, will be a great year for insurers who are using this technology as Big data is going upgrade itself, allowing insurers to predict the market trends so they can adjust their existing strategies accordingly. This will boost their productivity, enabling them to improve their relationship with customers.
4. Internet of Things (IoT)-
With the digitalization, consumers preferences are changing, and they are becoming more conversant in their choices. Offering personalized services and tailored communication have become significant for insurers. What if we say that you can easily calculate the lifetime risk of each consumer by just connecting smart devices to their body or day-to-day activities.
Sounds weird? IoT is making this happen! Insurers can offer easy discounts to consumers who have linked their smart devices to their insurance policies. These interconnected gadgets help insurers to check the health of the consumers, how they drive, how they maintain home security and a lot more. This trend will continue to rise in 2019 as well, offering great opportunities to insurance businesses.
5. Artificial Intelligence-
AI has been in the market for quite some time, and its applications are seen in our daily lives. You might have witnessed the visual effects of AI in sci-fi movies like Matrix, Transformers, etc. Not only in film, its real-world applications include email spam filters, airplane autopilots, and autonomous cars. AI will reshape the entire operational activities of the insurance industry in 2019.
AI is assisting insurers to focus more on growth strategies rather than handling repetitive tasks. In the insurance industry, AI is used to interact with customers as it behaves like a human. This tool thinks and acts logically as the set algorithms are very powerful, enabling AI to streamline recursive back-office operations in the insurance industry.
6. Cyber risk & security trends-
Numerous studies have shown that cybercrime costs the global economy 0.8% of GDP, which is $600 billion annually. Along with the evolving technology, the risk of cyber crimes is increasing every day.
This activity has provoked regulators to create risk management standards for all the industries quickly. It has been predicted that 2,000 insurance carriers operating in the US have already attained growth by staying compliant with the existing and proposed cyber regulations. Therefore, we can say that cyber security will soon become a popular trend.
7. GDPR & other related laws-
You cannot talk about Big data without describing the new digital privacy laws. GDPR stands for General Data Protection Regulation. It controls how companies collect, hoard and process data for any business that operates in, or connects with citizens of the European Union (EU).
Thus, it is crucial for insurance firms to stay compliant with these data privacy laws because this trend will continue as consumers battle for their right to privacy. Being an insurance carrier, if your insurance firm is located in a country where there are no such laws, it is advisable to organize your data management system accordingly so that you are all set for any privacy law.
In a nutshell, the motive of new technologies in the insurance industry is to bolster their business bottom lines. However, 2019 is expected to be a big year for all the insurers because the increasing adoption of technology will certainly eliminate the outdated models. And the actual winners in this market will be those who will understand the importance of change in the way that is fit for their insurance business.
Having the latest technologies and experienced workforce, we at Cogneesol deliver up to the mark insurance outsourcing services to clients settled across the globe. Are you looking for a trusted outsourcing partner? Contact Cogneesol and open doors for always growing business expertise. Call us at +1-646-688-2821 or email us at [email protected]
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