Internet of things (IoT)
The Internet of Things continues to grow, with more wearables and smart sensors than ever before. But newer technology is playing a major part in insurtech trends, too. For instance, drones can access remote areas and easily run advanced aerial image analysis, giving insurers a clearer picture of affected areas without needing to physically send someone to the area.
As a result of the IoT, insurers have access to gobs of data, allowing them to better understand risk, view trends and enable proactive modeling. This enhanced data means insurance companies can provide a better overall experience for their customers, such as tailored premiums, personalized service and faster compensation.
Of course, having all of this data is only useful if companies are able to analyze it properly. That’s where machine learning comes in – algorithms can quickly identify patterns and trends and provide insights on customers and potential risks. For example, machine learning can help with:
- Claims processing. Vehicle data can identify something like an aggressive brake or harsh turn, which helps provide a clearer picture for crash scenes. Telematics, for example, have been a revolution in big-data for more accurate insurance policies. As a result of better understanding driver behaviors, car insurance companies can process claims more quickly and efficiently.
- Risk modeling. In the past, insurers had to craft policies based on very rudimentary data on the policyholder and their vehicle. But thanks to machine learning, algorithms can now create personalized risk profiles. If a driver regularly speeds, that gets factored into a company’s risk model.
- Underwriting. Insurance companies can do things like outsource their underwriting to computers, allowing them to focus on improved customer service or offering special features for loyal policyholders.
- Detecting fraud. A company like Shift Technology uses machine learning algorithms to highlight suspicious claims from large datasets, improving its own pool of data.
We’re also seeing more uses of AI in insurtech, which can have lasting impact throughout the industry. It helps that AI is playing a larger role in cars themselves. With advancements like connected cars, autonomous vehicles and ride sharing apps, there’s plenty of room for insurtech to make its mark.
For example, the auto insurance company State Farm’s Drive Safe & Save feature uses AI to analyze in-car camera feeds, providing feedback on any unsafe behavior. Couldn’t wait to answer that text until you got home? Your car will know about it, and your insurance will be affected.