What is InsurTech?: Meaning, Working and Advantages

4 years ago

Content:

What is InsurTech?

InsurTech (an abbreviation of ‘Insurance Technology’) is a group of software, apps and start-ups used and operated in the insurance industry. Digital transformation has made its way into the insurance industry too. Today, the insurance industry is using more and more innovative technologies for improved efficiency and effectiveness. These technologies include artificial intelligence and machine learning, big data, blockchain, cybersecurity, IOT (Internet of Things), smartphone apps, consumer wearables, etc.

Hence, InsurTech is a term used to refer to all these new-age digital tools and technologies that optimize insurance firms’ performance. InsurTech enables insurance companies to unlock the power of advanced data analytics and deliver excellent customer experience.

InsurTech is a digital evolution in the insurance industry, which has brought Insurance enterprises and insurers to new technological and digital platforms. InsurTech has entered almost every aspect of the insurance business, including customer service, supply chain, product, and more. It offers auto-monitoring devices, customer-facing phone apps and wearable tracking tools. InsurTech not only reduces the costs of insurance firms but also significantly enhances customer satisfaction.

How Does InsurTech Work?

InsurTech enables us to buy insurance online just with the help of your computer or mobile phone. You can now go online and access insurance products and services easily. It makes things very efficient.

InsurTech has also provided insurance customers with many more insurance options than before. The insurance coverage can be customised and tailored according to unique needs. Unlike the old frustrating methods of buying insurance, InsurTech lets you complete an online application within minutes. It dramatically helps small business owners as they can access and shop for various kinds of insurance coverage from a single online platform.

What are the Applications of InsurTech?

Customer identity verification: Insurance firms, brokers, and reinsurers must gather significant customer data to complete the KYC process. InsurTech expedites this crucial and time-consuming process with blockchain-based technology. This technology works so that all the customer documents, along with the evidence of validation issued by authorities, are stored and maintained as digital records.

Payment processing: Insurance premiums and claims payments have become much more streamlined and quicker, thanks to InsurTech. Technologies like wearable tracking devices and machine learning are applied to automatically track, record, calculate, convey and pay premiums.

Smart contracts: Insurance firms can quickly and easily create paperless smart contracts using InsurTech. In smart contracts, automated blockchain protocols are used for authentication, negotiation and facilitation. Thus, claims management becomes a hundred times easier than traditional methods. The risk of fraudulent activity can be significantly reduced and customer satisfaction can be increased simultaneously.

What are the Advantages of InsurTech?

InsurTech gives insurance customers more control and the system becomes much more transparent to them as they can choose from various options. They can select tailored and customized policies and products which will perfectly suit their needs.

The entire process of obtaining insurance online is much simpler, more accessible and quicker. Easy-to-use customer-facing apps remove a significant amount of stress involved in the claim management process.

Customer identification and verification technologies potentially reduce the risk of fraud.

Bottom Line

InsurTech is precisely what the insurance industry needs. InsurTech has made it possible for the insurance sector to make vast and successful strides. With claims management, the online application process, automated underwriting, and fraud prevention, InsurTech ensured higher operational efficiency, lower costs and better customer experience.

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