There is no doubting the effect that developing technology has had on the life insurance market, but the sector’s transition is far from complete.
As all business sectors continue to develop inventive methods to adapt to new technology and clients’ digital needs, life insurance companies must identify their place in the equation. This demands a heightened focus on the industry’s leading developments, such as applied AI, distributed infrastructures, and the future of connectivity.
In this post, we will analyze the complexities and rewards associated with these three developments. In addition, we will discuss how each of these changes may alter the life insurance environment.
Three Major Trends To Monitor In The Life Insurance Technology Industry
In September of 2021, Diabetes 365 published a paper titled “How Leading Technological Trends Will Transform the Insurance Industry”. This paper identifies many significant technological developments in the insurance sector, as well as the five trends anticipated to have the most significant influence.
These are the top 5 trends:
- Applied AI
- Decentralized Infrastructure
- The Future of Networking
While each of these five developments has the potential to transform the insurance sector, the first three trends are anticipated to have the most influence on the life insurance specialty.
1. Applied AI
Applied AI is the use of AI and machine learning to improve software-based goods and applications.
Among the fundamental concepts of applied AI are:
- Placing a stronger focus on end-to-end automation to provide speedier delivery, increased engagement, and enhanced convenience
- Creating more exact performance targets to develop decision-making models that can make more informed and accurate judgments or forecasts
- Emphasis on the requirement for enhanced continuous learning and adaptive programming
The life insurance sector offers several potential applications for applied AI. Among the most promising applications to examine is more consistent and accurate administration of an endlessly expanding client data pool and customer experiences powered by AI with improved tailored support capabilities.
Many people with diabetes may be offered insurance on a non-medical exam basis. Generally, life insurance for type 2 diabetics would take weeks for an approval. Now it may only take a matter of days.
Robotic Process Automation (RPA) is a recent addition to our applied AI, as organizations increasingly turn to RPA to revolutionize their operations.
2. Decentralized Infrastructure
As digital infrastructures grow more prevalent in the insurance business, the necessity for a dispersed infrastructure that allows for greater flexibility has become glaringly evident.
Life insurance companies are working hard to stay up with the digital transformation, with a part-to-whole migration to the cloud being one of the most significant shifts. The widespread adoption of cloud computing in the financial sector has caused it to grow and mature into a more potent computing platform.
Using distributed technologies — i.e., technologies that are shared between numerous systems and across multiple locations — enable life insurance carriers to adopt a cloud-native insurer approach. In turn, this affords life insurance firms the chance to have a significant effect and involvement in the increasingly interconnected financial sector.
3. The Future Of Networking
It would be irresponsible not to examine the future of connection while discussing an increasingly interconnected financial sector. Future connection refers to the acceleration of linked technologies and an interconnected system.
From the expansion of open banking to the growing public interest in block chain technology, it is evident that clients and professionals place a premium on better connectedness.
In terms of what the future of connection will imply for life insurance, an increase in the demand for omnichannel communication and safe data exchange is one of the most likely things to anticipate. Clients desire the option to access their accounts and services via their chosen channels, with the assurance that their sensitive financial information is secure.
Final Reflections
It has never been more important for life insurance carriers to keep ahead of the technology curve.
The rapid use of digital transformation and new technology is having an effect on all suppliers of financial services in the financial industry. The adoption of technologies such as applied AI and open finance will likely distinguish industry leaders in the life insurance market in the coming years.
To preserve a competitive advantage, life insurance companies must not only recognize the expanding significance of technology in the market but also adopt the most prominent trends. These technologies are crucial for supplying customers with the digital services they anticipate, hence fostering increased customer loyalty.