Today, an average insurance customer did some quick online research, asked for a price quote through their mobile phone, and wrapped up the transaction faster than ever before. Customer service is at the forefront of major trends in the insurance industry. Here’s a closer look.
Trend #1: A Trend Toward Tech
After a few years of struggling to adopt new technology, the insurance industry saw a digital transformation in 2017. Bold new startup companies lit a fire under industry giants. As 2017 comes to a close, most insurance companies now hold a strong online presence.
Adding to this trend is the issue of cost containment. Cutting-edge automated processes can save up to 65% in costs, something that is getting the attention of CEOs at small and mid-size insurance companies around the world.
Of course, all this technology is built to suit the needs of insurance customers. Research shows younger people often prefer to get a quote from a self-service interface rather than a human. This is good news for companies that keep up with tech. And it’s not bad news for agents: In many situations, people still far prefer speaking with a person.
Trend #2: Pay-Per-Risk Insurance
Experts are debating the impact of another emerging tech trend in insurance variously called pay-per-risk, real-time insurance, or insurance-as-a-service (IaaS). Popularized by newcomers like Slice, the cheeky upstart insurer that targets young, tech-savvy consumers, IaaS changes the formula for insurance consumption.
IaaS is based on the idea that insurance is only necessary when an item is in use. Take an expensive piece of heirloom jewelry, for example. If it sits in a safety deposit box 360 days a year and only comes out for special occasions, it seems wasteful to insure it year-round. IaaS covers it only on the 5 days when the owner wears it.
IaaS comes with new struggles to define service period, coverage limits, and even what exactly is being insured: An item? A person? A time period? The industry will need to resolve these issues, because pay-per-risk insurance is a trend that’s expected to continue.
Trend #3: Accelerated Claims
With new technology, claims reporting and resolution are happening faster than ever. That’s great news for customers, but a double-edged sword for insurers. As claim turnaround times decrease worldwide, consumers become ever-more-demanding about the speed of the process.
Mobile apps now allow instant reporting and claims initiation. Agents can be dispatched for inspection almost immediately. Basic claims can now be resolved within 1 to 3 days, depending on the complexity of the situation and the provider process.
Still, consumers are sometimes deeply unsatisfied with slower resolution times. Lengthy turnarounds are commonly due to circumstances beyond the insurer’s control, like slow government agencies, inaccurate estimators, and involved parties who refuse to communicate.
Trend #4: Bitcoin and Blockchain
Buzzwords like cryptocurrency and blockchain are starting to trickle down into the insurance industry, for good reason: They could reshape the future of buying insurance.
In a world where insurance is increasingly a mobile purchase, cryptocurrency - digital dollars - can be an easy form of payment. Bitcoin is perhaps the most famous cryptocurrency and has been the subject of much attention and debate in 2017.
Blockchain is a type of secure ledger that makes transactions publicly transparent and, paradoxically, more secure. The public archive means a single hacker can’t fatally alter an individual record. Because of its impact on security, some experts believe blockchain may be a significant trend for insurance companies in 2018 and beyond.
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