Page 23 - Insurance Times March 2022

recorded in multiple places at the same time, ensures Insurtech and Innovation
that there are fewer chances of identity theft or fraud, 'Insurtech' is a term used for technology-led companies that
this helps better customer experience, and ease the policy have revolutionized the way the insurance sector. Insurance
buying process.
companies leverage new technologies to provide insurance
With the automation of policy buying processes such as solutions for an increasingly digital customer base.
validating records, etc. reduces acquisition costs but also
reduces the turnaround time.

b) IoT (Internet of Things)
IoT devices, sensors, and telematics are on the rise in
the insurance sector. Especially wearables, sensors
embedded in vehicles along with advanced analytics helps
insurers in risk-based assessment which can help price
policies based on authentic data in real time and model
the policies as per the customer's profiling. A remarkable
example would be Drive Smart by Bajaj Allianz for the
auto insurance sector, which is a telematics device.
c) Artificial Intelligence
Employing Artificial Intelligence has brought betterment Fig 2: Focus of Insurtech (Source: McKinsey Panorama
in claims handling and management saving the insurers Database Report)
millions preventing the fraudulent claims using AI
Algorithms. As per the McKinsey Panorama Database Report, majority

A pioneer in using AI for their process is ZhongAn, which of the insurtechs are focusing on innovation on their
is China's first online-only insurance technology company, distribution channels and there seems to be a focus on
which leverages technology to "simplify insurance, price improving pricing by innovations.
risk more finely and distribute cheaply to a mass market
via the internet." Customer Engagement Innovation
Gamification is on the rise where the insurance providers
d) Big Data
have started adopting this practice where they simplified
Use of technology has been helping insurers to improve
the entire process and made insurance seem fun and
their risk assessment, product pricing, customer informational for their customers.
acquisition, settle claims, and attain profitability in a
better and faster manner. Big Data has helped to identify
It helps to form an emotional bond with the customers and
subrogation opportunities sooner with help of text at the same time easing the policy acquisition process and
analytics by which the insurer's loss expenses can be ensuring understanding of the same to the customers.
minimized, and loss recovery can be maximized.

e) Spatial Intelligence
Spatial Intelligence in Insurance industry's context is
location-based risk assessment, underwriting, quotes,
claims and client network segmented based on
demographics. In simple terms, the insurer can better
predict the claims, liability by using spatial analytics,
which can help the insurer to have; holistic view of the
data for better understanding and quick response that
will result in speedy customer service. This also results in
better analysis of their historical data for underwriting,
more accurate reserving as and minimize the leakages
in fraudulent/ exaggerated claims.

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