Each new insurtech idea or market entrant is often celebrated with great fanfare long before their product is fully integrated into the ecosystem. What is often overlooked, however, are the significant technical advancements made by carriers in recent years.
Generative AI and large language models represent exciting progressions in managing all aspects of insurance, but it’s important not to miss the strides carriers have made in recent years.
Six years ago, our organization, Alinsco Insurance, began using third-party AI to build and refresh our multivariate models—long before this practice was adopted by other auto-managing general agencies. Additionally, our use of telematics preceded all others in the non-standard auto MGA space. With the integration of these and other technologies, such as chatbots and automated underwriting, the concept of insurtech needs to be broadened to include carriers who are using new technologies to improve customer service, agency services, claims management, and underwriting.
In my nearly three decades in the insurance industry, carriers have often been viewed as slow to adopt new technology. Legacy systems and technical debt have burdened carriers and slowed innovation. However, this is changing, and carriers are now moving at a much faster pace. Data is no longer as siloed, young professionals are entering the industry with fresh ideas, and the intersection of tech and industry knowledge is helping achieve loss ratio goals and profitability.
The next leap forward will be in consumer and agent understanding of how these changes can benefit them. Over 60% of our consumers could save more if they adopted the usage-based options we offer via our mobile app. We have numerous cases of insureds saving 30-40% by utilizing our telematics options. However, agents are not yet spending enough time advising consumers on these opportunities. If agents stepped up their communication efforts, we would likely see higher retention rates and fewer customer service issues in the long run.
Insureds could also speed up their claims process by using our app to file claims. Submitting claims through the app further accelerates timelines. While there is a rise in the digital consumer, a level of distrust and concern over privacy remains. Overall, more consumers are opting for usage-based auto insurance, but adoption is far from universal and continues to be influenced by various factors. The trend suggests continued growth, particularly as technology improves and consumer awareness increases.
I am out encouraging agents to make the effort to educate themselves and insureds, as both stand to benefit from understanding and using new technology. It is an exciting time in the industry.
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