From old to modern technologies, the insurance systems and industry have been here longer than we realize. So, it’s easy to think that some processes and technologies will still be the same as years have passed.
The reality is that right now some insurance basics like policy management and claim processing have more facilities than ever before. With some insurance systems, you can even work smarter on boosting and scaling your business performance rather than just implementing one approach after another.
In this article, we want to summarize three technologies used in different decades and show you the advantages and advances of each one of them in the evolving insurance industry.
1990s: Early Stages of Insurance Data and Paper Digitization
- Imaging technology:
It allowed insurers to digitize paper documents and store them electronically. This greatly improved the efficiency of insurance processes by reducing the need for physical storage space and streamlining document retrieval.
- Electronic data interchange (EDI):
EDI technology allowed insurance companies to exchange data electronically with their partners, such as healthcare providers and claims adjusters. This greatly improved the speed and accuracy of insurance transactions by reducing the need for manual data entry and paper-based communications.
- Actuarial software:
It was widely adopted by insurers in the 1990s to automate the complex calculations involved in pricing insurance policies. These software tools allowed actuaries to model risk more accurately and make more informed decisions about premiums and policy terms. This led to more efficient pricing processes and improved profitability for insurers.
2000s: Importance of Customer Experience in the Insurance Industry
- Customer Relationship Management (CRM) systems:
CRM software was widely adopted by insurance companies to manage their customer interactions, track policy information, and analyze customer data. These insurance systems allowed companies to streamline their sales and marketing processes, provide better customer service, and make data-driven decisions.
- Predictive modeling:
It’s a statistical technique that analyzes data and makes predictions about future events. In the early 2000s, insurance companies began using predictive modeling to improve their risk assessment and underwriting processes. By analyzing large amounts of historical data, insurers could more accurately predict which customers were more likely to file claims and adjust their premiums accordingly.
- Online platforms:
The early 2000s saw the rise of online platforms for insurance sales and servicing. Many insurance companies began offering online quotes, policy management, and claims processing. All of these allowed customers to interact with the company from the comfort of their own home. This helped insurers reduce administrative costs and improve customer satisfaction by providing faster and more convenient service.
Current Technologies: Scalable Insurance Systems to Boost Business Performance
- Artificial intelligence (AI) and machine learning:
Insurers take advantage of AI and machine learning by automating many routine tasks, such as claims processing and underwriting. These technologies can analyze large amounts of data and make predictions with a high degree of accuracy, allowing insurers to better manage risk and improve customer service.
- Internet of Things (IoT):
IoT technology, such as telematics devices and smart home sensors, is being used by insurers to collect real-time data on customer behavior and risk factors. Companies can use ti to develop more personalized insurance products and pricing models, and can help insurers identify potential risks before they result in claims.
- Blockchain technology:
Insurers use it to improve the security and transparency of their transactions. By creating a secure and decentralized database, insurers can reduce the risk of fraud and improve the efficiency of their processes. Blockchain can also be used for smart contracts, which automate the payment of claims based on pre-determined conditions.
The history of the insurance industry is huge, and these legacy systems have taken us where we are right now. While these insurance systems can continue operating in some cases, they may have limitations in terms of scalability.
Innovation and digital transformation are here to stay. So, insurers need to balance the benefits of old and modern systems against the demands of the market. With current insurance systems, companies can gather more data, analyze it in real-time, and improve decision-making to gain and retain more customers.
By counting on a reliable IT outsourcing partner, you can transition more securely and smoothly from old systems to modern ones. Or even integrate custom features into your current system based on your business needs.