Insurers that deploy the right software are able to automate tasks, cut costs, and reduce fraudulent transactions. New innovations in insurance technology assist both insurers and their policyholders— either through encouraging safer behavior or providing seamless onboarding. What follows is an overview of the latest technological solutions that are disrupting the insurance space.
Internet of Things
Fitness trackers and smart gadgets and appliances have led to an explosion of meaningful data.
Insurers can use this insightful information to better understand their customers, leading to new innovative insurance services.
Insurance providers set better rates, optimize risk management, and reduce the rate of claims.
For example, an insurance provider can alert a policyholder in real-time when they engage in risky behavior.
Machine learning is a powerful AI-based tool that relies on complex algorithms to manage data without oversight. Over time, the ML solution comes to conclusions on its own.
It automates critical processes such as claims management, underwriting, and fraud detection.
Problems with ML
A serious drawback to machine learning is that it needs large volumes of high-quality datasets in order to properly train the neural network.
So, ML is only as reliable as the data that’s used to train it.
The Black Box
ML solutions are vulnerable to the black box problem, which is a serious problem for insurers. What happens is that after a while the reasoning of the algorithms becomes impossible to comprehend.
This can be an insurmountable hurdle because insurers need to have a clear understanding of all of their actions.
The Advantages of Business Rules Engines
A business rules engine is an easy-to-use solution that is helping insurers take advantage of their talented staff by enabling non-technical users to manage policies without help from IT.
As a result, updates to existing insurance products are made on the fly, and new products can immediately enter the market.
How Do Rules Management Systems Work?
A business rules engine is a powerful software solution that manages business rules. These rules are in essence if-then statements that guide your enterprise software.
A business rules management system automates repetitive and complex tasks and cut down on potentially expensive mistakes.
The Impact of APIs
Insurers frequently face problems with digitization as a result of outdated legacy systems and IT architecture.
One of the best ways to accelerate the process is by using APIs.
An Application Program Interface (API) is a set of protocols built for software engineering. APIs allow connected devices to securely transfer data.
Insurers have been turning toward APIs because they’re able to be integrated into older IT and get data from various sources.
Rules Engines and APIs
APIs can encourage innovation in the insurance industry by simplifying the transfer of data between programmers, policyholders, and insurers. This creates new possibilities for innovation and growth.
Business rules can verify the data streaming from the connected devices to decide whether any actions are required.
IoT and Rules Engines
Insurers need to have a way of properly utilizing the large volume of data that they gather IoT connected devices.
This is where rules engines enter the picture. Policyholders can agree to receive alerts or emails from insurers warning them of potentially risky behavior.
For instance, if the house temperature plummets to below zero, then alert the policyholder that this might lead to frozen pipes that burst to create water leaks.
Using information from connected appliances, the insurer becomes a partner who helps policyholders minimize risk while reducing costs.
The insurance technology discussed in this article is helping insurers rethink how they handle their processes — from onboarding and product innovation, underwriting, and fraud prevention.
This wide range of robust software tools can automate critical tasks while enabling insurance carriers to meet policyholders’ needs in real-time.