Technologies To Aid Automation Of Insurance Processes
Cyber insurance providers are increasingly adopting advanced technologies to automate insurance processes, reduce cost of operations and improve efficiencies. These technologies include artificial intelligence (AI) applications such as robot-advisors, robotic process automation and block chain, a distributed decentralized ledger and underlying technology of bitcoin (a cryptocurrency) not managed by a central authority. These technologies help automate the risk associated and complex processes, provide scope for machine learning, avoid repetitive and time taking processes, provide quick and error-free services, and secure information exchanging processes such as sending, receiving and storing of information. Chatbots are another example of the technologies used by cyber insurance providers. A chatbot is an AI-enabled robot used to interact with customers to help the customers better understand insurance policies and payments. For instance, SPIXII, an automated insurance agent created by an English startup, is widely implemented among insurance providers’ websites in France. The insurance agent is accessible through messaging platforms or native mobile apps, and helps clients purchase the correct insurance coverage for their requirements. Another example of a chatbot widely used to optimize operations in insurance companies is Geico’s mobile virtual assistant, Kate. The chatbot is used to answer clients’ questions about policy coverage and payments.
The global cyber insurance market is expected to grow from nearly $8,153 million in 2019 to $14,144.6 million in 2022 at a compound annual growth rate (CAGR) of 20.2%.
Big data is another technological advance in the cyber insurance market. Cyber insurance providers are increasingly using big data analytics solutions for faster claim assessment and risk identification. Big data is being used in claims management, pricing, underwriting and risk selection processes among others. This growth in the use of big data is mainly driven by increasing points of contact including social media, which provides a bulk of data that can be transformed into insights by insurers to efficiently execute the settlement process. Big data consists of high-volume, high-variety and high-velocity information, and this benefits insurers in multiple ways such as faster identification and reporting of events, automatic claim assessment and calculation of loss reserves. According to a survey by Willis Towers Watson, a UK-based risk management, insurance brokerage and advisory company, in 2017, 46% of insurance providers were using big data analytics solutions to analyze unstructured internal claim information, and this is expected to increase to 92% by 2020.
New technologies and the digitization of businesses have exposed other industries such as telecoms and professional services to cyber threats led by the online presence. Following the emergence of cyber insurance providers’ services, telecoms and professional services companies have started shifting their preferences from traditional insurers to cyber insurance providers.