Impact of Technology in the Insurance Industry

It can no more be contested that technology is the wizard of our time. There is no argument that can stand against the bunch of benefits and impact which the world has been seeing since the inception and introduction of this modern sorcery and magic. Whatever you might want to call it, technological innovations have successfully bewitched our small world with charm and ease, in such a way as had not been witnessed before. So much more for the impact of technology in the insurance industry!

The insurance industry, just like every other industries in the world, certainly has begun to comfort herself in the luxury afforded it by the values and responsibilities of technology. More insurance companies have expanded their frontiers owing to its benefits which include direct approach to customers and interested individuals without intermediary interruptions. Hitherto, the industry that saves and protects lives and properties cannot barefacedly deny the many ways through which technology has come through for her both to protect and save her functionally from the possible dangers of business.

Impact of Technology in the Insurance Industry

No doubt, technology has done a lot of good than harm to the insurance companies and in the insurance industry these days. Some of the evidence of the impact of technology in the insurance industry will be absolutely discussed one after another in the below content. Pay attention to the 5 (five) that will be listed here.

1. The Use of Aerial And Digital Graphic Ensures Presentability

Some of the benefits of aerial and digital imagery provided by technology is that it has a huge potential to become a primary tool for insurers to assess properties and the technical advancements in it can be used by insurance companies for seamless data management, avoiding risks, providing a quick response to catastrophe events, and detecting fraud. It also reduces the cost of insurance companies processing claims. Though it has a lot of benefits, it also has a few challenges for its implementation. Insurers can look for alliances with professional firms to provide these services. Data storage and processing capabilities will need to be enhanced to accommodate and process images.

2. The Expansion of the Business

With technology in place, there is a large variety of products to offer since before now insurance companies had fewer policy products to sell. So acquisition of new customer is always an important issue and companies are forced to increase their sales team to reach out to new buyers. To sustain growth and generate profit on a continual basis, online or digital marketing processes can aid insurance providers to reach out directly to the vast magnitude of online buyers. Traditional advertising methods such as hoardings, banner promotions, signage and TV commercial ads incurred substantial promotional expenses whereas the same objectives can be availed through online PPC advertising campaigns which are easily afforded and cost significantly less. Moreover, it’s much easier to target new buyer audiences online rather than reaching out to them physically as was the case in the past. Technology helps to reduce customer acquisition cost.

3. Minimization of Costs

For any company it’s always fruitful to save a few dollars and reduce expenses whenever possible to save for a rainy day. Operational overheads are a major concern to organizations and demand a large chunk of working capital to support business processes and operational activities. More and more fortune 500 companies now have in-house departments which oversee operational overheads and find innovative ways to reduce expenditure while expediting the organization’s business processes. Process automation can go a long way in reducing workforce and employee cost by substituting humans for technology enabled processes and devices. It’s more reliable and cheaper to store, retrieve and process documents electronically using PC networks and limited human intervention rather than employing a huge team of clerical personnel to physically move files and folders to different places in cabinets and storages situated in different parts of the building. In addition, you don’t need several branch offices in different parts of the country and maintain staff for all of them. Technology helps to reduce operational cost.

4. Grassroot Reachability and Wide Coverage

The heart of any insurance company, policy underwriting policies and efforts put in by the evaluation agents directly decide how well the insurance business will grow and whether the company shall make a good profit through the premiums or not. Insurance agents need to communicate and ask a lot many questions before they can give a clearance. One of the biggest hurdles faced by agents in the past was meeting a client at a particular location, or at a particular time and explaining the nitty-gritty of the policy. This consumed a lot of time and agents had to travel a lot to “close” customers and meet target deadlines. Nowadays, policies are clearly explained on portals and interested visitors can communicate directly with the agents using online chats tools and video conferencing facilities to inquire about eligibility aspects, answer queries and facilitate the agent in deciding the underwriting process. That way agents can respond to many customers in a day and decide which customer should be given the policy and which shouldn’t. Technology helps to make the underwriting process easier and quicker.

5. The Facilitation of Increase in Return Of Investment

All businesses strive to achieve high ROIs to increase profits. Businesses generally borrow capital from banks and investors at high interest rates or raise the money through public limited issues and incorporations. Technology helps to drastically reduce working capital and offer a tremendous opportunity for insurance companies to churn out higher profit margins through online activities, electronic funds transfer and process automation which are all made possible using reliable technologies.

There are many other significant advantages of using technology to boost sales by making it easier for consumers to avail insurance policies and expediting the underwriting process. Reputed insurance companies provide affordable insurance packages to consumers worldwide and even help them in their dire times.