Technology is changing how insurance companies operate and provide services to their customers. The past few years have seen quantum leaps forward in the technologies available to insurance companies. The hope is that these advances will help both the customer and the insurance company, providing better coverage for a more affordable price. Here are four developments shaping the insurance industry in 2023.
Use of Artificial Intelligence
Insurance companies are increasing their use of artificial intelligence (AI) in all aspects of the claims process. They are relying on AI to help them process claims faster. Sometimes, the insurance company may not even need to send an adjuster to the site.
In addition, insurance companies are also using AI to detect fraud in claims better. Instead of a manual process, which can slow claims and miss instances of insurance fraud, companies can now use AI to spot some problematic claims.
Underwriters rely on these new technologies to help them with risk-based pricing. The hope is that AI can introduce efficiencies leading to a quicker claims process and better risk pricing.
However, AI is still relatively new and cannot predict or eliminate all claim issues. Reliance on AI to adjust claims could be the perfect storm, leading to claim denials and bad faith suits against carriers.
Automated Digital Policy Options
Insurance companies often offer one-size-fits-all products that do not fit everyone. Some people either end up paying for coverage that they do not need, or their policy does not insure their specific risks.
Insurance companies are moving to more digital models that both allow for better customization of policies and reduce some of the need for human intervention. Your experience may become far more personalized and tailored to your own needs without even needing to speak extensively with an agent. The hope is that some of these savings will allow insurance companies to try to compete on price and pass some of those savings along to customers.
Advanced Analytics in the Pricing of Policies
Policy premiums often rely on older calculations when the underlying conditions may have since changed. As a customer, your risk exposure today may not be the same as yesterday, which could call for a repricing of premiums. Depending on the risk conditions, this repricing could mean lower or higher payments.
There are many ways that insurance companies are using to model behaviors and identify exceptions, potentially leading to lower premiums. For example, auto insurers are using telematics to identify risky behavior as it happens and give motorists real-time advice about safe driving, which has led to lower premiums.
Use of Blockchain Technology
Insurance companies must process large amounts of customer data between their organization and stakeholders. They must both monitor current risk conditions and prevent insurance fraud. Transferring data is risky because it could be vulnerable to hacking and cybercrime.
Blockchain technology allows for a more secure transfer of data with less risk of loss of data integrity. Large insurance companies are teaming up to explore further uses of this technology in their business.
In addition, this technology is allowing insurance companies to unlock value through a blockchain-based insurance solution. Blockchain-based insurance products can mean that claims are automatically granted or refused without human intervention based on the extensive customer information that the insurance company already has.
Contact Our New Jersey Insurance Lawyers at Herold Law, P.A. for Legal Help Today
If you are having difficulty with your insurance claim, speak with our New Jersey insurance lawyers at Herold Law, P.A. You can schedule a consultation by calling us at 908-679-5011 or by contacting us online. With offices in the Plainfield area, including Warren, New Jersey, we proudly serve clients across New Jersey.