By Irfan Shirwani, Managing Director – Placement & Claims, Lockton
Technology is transforming the insurance industry in innumerous ways, making strong technical capabilities essential for insurers to stay competitive and ensure customer satisfaction. The integration of advanced technologies across various insurance functions—such as customer management, risk assessment, underwriting, claims processing, and operations—has made it imperative to establish a robust tech foundation. This calls for companies to invest in long-term technical infrastructure and foster a culture of technical excellence. Some of these strategies that will enable insurers to build and maintain their technological edge are illustrated below.
Enhancing tech infra and tools
Learning and using the required tools and infrastructure facilities is very important for any sector looking for a tech upgrade. As artificial intelligence (AI), machine learning, and cloud-based tech dominate the tech play, insurance companies should use them to streamline processes, increase efficiency, and improve decision-making capacities. For instance, AI-based claims automation tools can streamline processes, enabling insurers to conduct accurate claim assessments and settlements. Insurance firms can use AI to automate routine tasks, reduce processing times, and thereby improve customer satisfaction by making quicker solutions.
Integrating big data and machine learning into risk assessment and pricing models enhances decision-making speed and accuracy. It can help companies analyse reams of datasets to identify patterns and improve risk prediction and fraud detection in no time. Cloud-based platforms provide better-enhanced data security, help build scale fast and result in enhanced collaboration with teams. They facilitate seamless remote access to critical information, improving operational efficiency and agility.
Predictive data analytics can help Insurers to assess potential policy cancellations, frauds, other risk events and be well prepared to handle them.
Drones can be used to perform such risks and claims surveys that are otherwise very complex or sometimes impossible for humans to perform.
Sharp data analytics offers insurers the option to personalise offerings based on consumer needs, fix pricing and improve overall delivery. API integration automates interactions between different systems, resulting in real-time data exchange.
Staying abreast of industry trends
Black swan events and changing regulatory norms make insurance face sudden risks. This means one needs to stay informed and a step ahead of broader industry trends to remain in the growth trajectory.
To deal with changing regulatory norms, insurers must have a select team to monitor changes in local and international regulations that work with legal and risk management to interpret key regulatory changes, update company policies, and maintain compliance timelines.
Insurers should also be in tune with new risks, especially in fields as diverse as cybersecurity, AI integration and climate change. Understanding these issues will help insurers build relevant products and offer efficient claims for their customers. Insurance firms must also participate in industry forums and conferences and collaborate with regulatory bodies to learn more about emerging trends in the sector, share knowledge, and stay informed about the competition, that allows them to stay ahead of the curve and anticipate problems quickly.
Improve cybersecurity
As everything goes digital-first, stringent cybersecurity norms are essential. Insurers must implement advanced cybersecurity options, including encryption, multi-factor authentication, and continuous monitoring to safeguard data.
Regular penetration testing can identify vulnerabilities in digital infrastructure and help achieve timely resolutions. Encryption protects sensitive information from unauthorised access.
Implementing multi-factor authentication and robust monitoring systems helps prevent access and reduces the risk of identity theft. Insurers must set up dedicated cyber security teams for audits and vulnerability assessment. It can help them identify threats soon and reduce the risk of attacks.
Developing technical excellence
A culture of technical excellence is crucial for long-term success of an organisation, and it calls for developing employee capabilities and building collaboration. Insurers must work on technological training programmes covering multiple insurance-centred verticals, from underwriting and claims management to emerging technologies like AI, machine learning, and blockchain technology. Encouraging a knowledge-sharing culture where employees can exchange ideas and learn from each other helps in continuous improvement. Promoting collaboration between technical and business development teams can lead to innovative and efficient solutions. Recognising and rewarding employees who offer creative solutions will help in continuous improvement and engagement.
Building and maintaining robust technical capabilities in insurance requires a mix of advanced infrastructure, ongoing technical training, strong cybersecurity measures, and a culture of innovation to help insurers stay competitive in a changing market.