How Algorithms Are Becoming Part of Traditional Businesses – Like Insurance

Algorithms are increasingly becoming part of the business landscape. Even traditional industries such as insurance businesses are increasingly turning to algorithms to drive automation and efficiency.

Two people making calculations at a desk - image about whether startups should provide health insurance

One traditional industry that has embraced new technology at a slower pace is the insurance industry. But technology, software, and algorithms are increasingly being used even here – and especially here.

How has technology changed the way people do business?

Businesses are changing at a rapid pace, and especially in the unique circumstances of 2020. Not that long ago, shopping for insurance, meant either sitting down in the office of an insurance agent and going over the available forms of coverage in person or calling a representative on the phone to discuss your options.

Purchasing insurance and other types of supplemental coverage almost always involved a lengthy conversation with your agent to supply pertinent personal information, as well as information about an item needing coverage.

The visit or phone call, along with the long, complicated forms and the subsequent scramble to retrieve data requested by the agent, could easily become an all-day process, which meant that shopping for insurance was the type of chore that people would put off as long as possible, regardless of whether they may be able to get a better deal elsewhere.

Any business might have similar challenges. It’s important to take a step back every few years and examine what processes might demand more automation or more analysis through Artificial intelligence – just to sort through the data.

Technologies have made it easier

Thanks to the astounding advances in technology that have occurred over the past couple of decades, the above insurance-buying scenario is very much a thing of the past. Consumers and Businesses alike are shopping online for new insurance policies.

Things are becoming even simpler for current and future policyholders looking for a convenient way to get the most affordable price on the coverage they need, without having to pay extra for anything they’re not going to use. Algorithms are already changing the way we shop for coverage, from the quoting process to the types of policies we are able to choose.

If the world of insurance can be enhanced through technology, any industry can. Until recently, insurance was an industry that hadn’t changed much over the years. The model stayed about the same for decades, with providers charging their customers premiums for coverage based on an assessment of their risk determined by a variety of factors.

Much like the way fintech has changed the face of the finance industry, “Insurtech” has become a disruptive force in the way insurance companies do business. As with a number of other industries, new technologies that utilize Big Data, artificial intelligence, and the Internet of Things are paving the way for a more competitive insurance market.

Technology has a way of disrupting industries. To become a disruptor in your industry, try imagining how data and technology might better serve both customers and bottom lines.

How Does Technology Disrupt?

Nearly everyone has smartphones, wearables, and other mobile devices that they keep on them wherever they go. Because of this, the amount of data that is available to collect and be analyzed by companies is huge. Companies can optimize user experiences and provide the customer with exactly what they need whenever they need it.

Companies collect consumer data in order to better anticipate their customers’ needs so that they can nimbly and efficiently meet and exceed a growing list of expectations for what a customer wants out of a business. This applies to numerous industries – retail, food service, and banking, to name a few- and insurance is no exception.

Gone are the days of filling out long, complicated forms and purchasing a one-size-fits-all solution from a vendor. Businesses and consumers alike want convenience, accessibility, speed, and above all, customization.

Technology makes it possible for even small startups to be able to offer a broad range of tailor-made offerings to give the customers the solutions they need rather than charging for something loaded with unnecessary features.

By collecting and aggregating data for each individual customer or business, even insurance companies are able to quickly provide their solution – coverage – via a mobile app, adding an additional layer of convenience to the customer experience.

Additionally, they can use consumer data to offer the right insurance products at the right time, people can benefit by qualifying for discounts and deals based on their up-to-the-minute driver data, sent straight from their car itself, that can make for significant cost savings compared to traditional insurance policies not driven by technology.

Want examples of Insurtech in action? Olive is revolutionizing extended car warranties with their ability to deliver immediate quotes for auto extended warranty plans. More on auto extended warranty plans can be learned here. That helps both businesses and consumers save money through their process.

Technology is changing the world

As technology continues to impact our global community, we can count on further innovation from companies in virtually all industries. The traditional way of purchasing from business vendors will become less and less desirable to prospects looking to quickly choose the options that best fit their needs – and can save them money each month.

From the coffee we order from our mobile app each morning to the bank transfers we’re able to complete at the touch of a button on our smartphones, we are accustomed to having our specific needs met instantly by companies that seem to know who we are and what we want from our experience. Why should your buyer’s experience be any different?


Interesting Related Article: “InsurTech: Get Your Two-Wheeler Insurance Online