For a company to succeed, it should work efficiently at an operational level. This success can be achieved by InsurTech. It is an open secret that it can change the insurance industry inside out and contrary to the belief, this will be a positive change.
So, here is how operational efficiency can be improved with the help of InsurTech:
By Using Artificial Intelligence
The benefit of using Artificial Intelligence (AI) is widely accepted for leveraging InsurTech. AI can increase efficiency by virtually negating human errors. Errors are a common occurrence in the field of insurance. These errors are possible mainly during the claim cycle. Also, Artificial Intelligence in insurance industry can evolve to find better solutions with each claim.
Apart from claims, AI can be implemented in chatbots which provides support to potential as well as existing customers by answering their queries. It can be used to automate underwriting of an insurance policy by evaluating the information declared by a customer as well. Finally, Artificial Intelligence can provide a better workflow for instant claims.
By Heightening Customer Experience
A customer is at the core of a business irrespective of the type of business model in force. Higher returns can be anticipated when this core entity experiences satisfaction and gets value for money.
- Insurance works on the principle of indemnity. The customers who make a claim against their policy have already suffered a loss promised to be covered by insurance. Thus, it is highly important to avoid delay because of operational inefficiency. InsurTech can reduce the time delay especially during claim settlement.
- Largely, customer queries are related to cost, coverage and claim status. Out of all the customer queries, 50% of them are to inquire about their pending claim status. This happens on an average. Sometimes these claims are in the pipeline for the lack of accurate information or insufficient documentation. This can be avoided with the help of InsurTech which can facilitate customers to provide as much information as possible by streamlining the claim registration process. A funnel can help to bifurcate claims with incomplete information even before registration.
By Increasing Innovation
Insurtech came into the limelight in the past few years. This is the technology that has been created to disrupt an age-old business with little to no scope for innovation. InsurTech has the potential to increase innovation in the industry. Innovating operations at a minute level may provide a completely new direction to a model which has been in force from the past 300 years.
The biggest change is digitizing insurance and simplifying the process for customers who do not need to rely on intermediaries at any stage of the purchase journey. Digitization has enhanced customer experience while decreasing operational costs and is also time efficient. But, being in a nascent stage the full potential of this technology is yet to be discovered. Insurers are yet to experiment on a larger scale to judge the performance of InsurTech when fully functional.
The operational efficiency can be improved by revisiting each section for enhancements. Understanding the life cycle and role of the workforce involved is a single operation can give a basic idea about the loopholes. Standardizing processes, where applicable, can reduce unnecessary redundancy. Simultaneously, separating bundled processes can clearly define their scope.
InsurTech can also be beneficial for experienced players in the insurance industry as compared to start-up insurance companies. Operations which have been in force for a very long time can be improved with the help of this technology.
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