Insurance agents and real estate professionals can stay ahead of their competition this year by understanding and utilizing the latest insurtech trends in 2023.
This is because many increasingly prevalent trends in the insurance industry can save them time and money. Equally important, insurers, appraisers, and real estate agents could streamline their processes and enhance their efficiency by tapping into the most current technological products and tools.
If you’re looking to take your game to the next level, boost your productivity, or simply stay up-to-the-minute on the latest know-how that’s transforming the sector, this list of the top 10 insurtech trends in 2023 is for you.
Insurtech Trends in 2023
Over the last few years, many technological trends in the insurance industry have reshaped the way that various insurance company departments, agents, and even real estate professionals do their job. As time goes by, these technological advancements are becoming more and more sophisticated, groundbreaking, and, above all, beneficial for the different players in the sector.
With that in mind, this list goes over the most critical and disruptive insurtech trends in 2023.
1. Applied Artificial Intelligence (AI)
Applied AI is one of the most disruptive trends in the insurance industry. In a way, applied AI is similar to search engines. While the latter gives you web results, images, and videos based on the term that you searched for, applied AI can give you answers when you ask it questions, direct you to a certain page or form based on the services that you need, and perform other functions.
- Chatbots & Virtual Assistants – These tools answer simple questions, pull out information, and help policyholders file claims or obtain documents.
- Processing Claims – Policyholders can fill out online forms and answer questions when they want to file a claim. Based on these inputs, applied AI-powered tools would choose the right form, automatically analyze it, and quickly process claims.
- Identifying Fraud – Fraud-detection software, such as facial recognition tools, enable insurers to cut costs and immediately identify when a non-authorized person is trying to access a policyholder’s account or file a claim on their behalf.
Applied AI is especially important because many of the other insurtech trends that we will go over rely on this technology.
2. Generative AI
Generative AI is similar to applied AI. However, the main differences between generative vs applied AI is that the former creates new forms of data based on how users interact with it. For instance, generative AI might come up with custom policy recommendations based on an applicant’s preferences, habits, and behaviors.
To further illustrate, here are some examples of insurance technology trends in 2023 that rely on generative AI tools:
- Insurance Applications – When a client wants to apply for a policy, a website page or app that utilizes generative AI may ask them questions about their employment, income, property type, and other related details. In turn, generative AI would create a policy with the premiums, areas of coverage, and amounts that suit that applicant’s specific needs.
- Underwriting – Generative AI helps insurers analyze a policy applicant’s past behaviors and patterns to predict the risk associated with covering their vehicle or property and whether to approve or deny the application.
- Processing Claims – Claims processing tools that deploy generative AI can create images and videos. These visuals help insurers understand the type of damages that a policyholder incurred and assess them in an incredibly accurate manner.
It should be noted that some of the prominent generative AI trends in the insurance industry utilize what’s known as machine learning technology.
3. Machine Learning (ML)
Machine learning (ML) technology is a subset of AI. ML uses complex algorithms that collect data in order to identify patterns and make future predictions. For instance, ML can gather data on policyholders to potentially detect fraud or predict how likely it is that they will file a claim in the future. Insurers may also rely on ML insurance technology trends to learn about new markets with a high profit potential that they could enter. ML-powered insurance technology trends are able to complete other tasks that are traditionally delegated to humans.
4. Chatbots
Simply put, chatbots are automated, AI-powered customer service representatives. Almost any agent or insurance company can take advantage of chatbots since they’re relatively easy to use and integrate into a website or app.
When you visit an insurance company or independent agent’s website or use their app, you may ask an automated chat tool questions or send them text messages. These chatbots will give you more information, answer your question directly, refer you to a certain page, or connect you to a live person who could assist you.
With that in mind, here are some of the benefits that insurers gain by using chatbots:
- They save money on hiring customer service teams to perform these functions.
- Agents can easily integrate a chatbot within their website, which is much less costly and time consuming than hiring a personal assistant or answering policyholders’ questions directly.
- Chatbots allow insurance companies to collect data on how customers interact with the firm and the type of questions that they typically ask. In turn, this allows them to enhance their customer service offerings.
Chatbots are also referred to as ‘virtual assistants’ since they provide support and assistance to customers in a variety of ways. For instance, if you ask the chatbot “how do I make a payment?”, they may give you a link to a payment page or ask you more questions to understand that type of payment that you want to make (the monthly premium, deductible, …etc.).
5. Paywalls
Paywalls are integrated tools that allow you to make a payment directly through the insurer’s website or app. Some paywalls or apps will even send you automated reminders when your monthly premium is due.
This is one of the most popular insurtech trends in 2023 among both insurers and independent agents because it allows them to save a lot of time and money on collecting payments. Here is how:
- Automated reminders reduce the likelihood that policyholders will miss a payment or have their coverage lapse.
- Agents and billing departments spend less time on calling clients to collect payments or obtain bank account/debit card information.
- Insurers have to deal with and store less paperwork since more of their policyholders will use paywalls instead of sending paper checks in the mail.
Many insurance companies rely on third-party software providers for their paywalls. However, this technology is becoming increasingly advanced. As a result, insurers are starting to build their own, in-house paywalls, without redirecting customers to a third-party app or website when they want to make a payment.
6. Outsourcing & Streamlining Technology
These insurtech trends particularly pertain to underwriting and processing claims. Insurance companies typically have entire teams and departments that are dedicated to performing these roles. Yet, thanks to AI technology, insurers can outsource them to underwriting and claim processing software while they refocus their employees’ time and energy towards other tasks.
To illustrate, here are a couple of examples that highlight how these insurtech trends function in practical, real-life scenarios:
Underwriting
Let’s assume that a homeowner wants to apply for a property insurance policy, and they use an AI-powered app to do so. To evaluate their risk and choose the right coverage for them, the software would ask the applicant about the following:
- Basic information – their age, household size, occupation, …etc.
- Zip code – to determine if their area is prone to floods, wildfires, and other types of disasters.
- The age of their home – an older home is more likely to experience structural damages than a relatively newer one
- Value of their property and belongings – applicants with expensive properties and belongings may require insurers to pay out larger claims in the event of a disaster or other types of damages.
Processing Claims
In the same vein, insurance technology trends are making the auto and property damage claims process easier and less time consuming for insurers. For instance, AI can ask policyholders simple and straightforward questions when they want to file a claim. From there, AI-powered tools automatically complete the forms for them. Just as importantly, whether an insured client files their claim automatically or manually, AI can scan the form and rapidly pull out the relevant information from it (such as the policy number, types of damages, and payout amount). AI could also quickly deny or approve the claim.
7. Data-Driven Risk Analysis
In addition to simplifying and streamlining underwriting processes, many of the top insurtech trends in 2023 are enabling insurers to analyze and manage their risks through data. These trends in the insurance industry go beyond property damage, and they extend to the risks that are associated with fraud and entering new markets.
Mileage Trackers
Auto insurers ask drivers (especially new policyholders) to attach mileage tracking devices to their vehicles. These devices identify how many miles the policyholder typically drives, the roads that they take, and whether they aggressively hit the breaks or make sharp turns. From there, insurers use this data to determine the risk of insuring a driver and how much to charge them in premiums.
Fire & Flood Detectors
These detectors immediately alert the relevant authorities whenever a property is at risk for a fire or flood. As a result, insurance companies minimize the likelihood of paying out claims that are associated with damages caused by these events.
Fraud Detection
AI-powered fraud detection software asks a policyholder to place a cellphone in front of their face to verify their identity. This is similar to logging in with a username and password, but it adds an extra layer of protection and ensures that only authorized users can access an account, file claims, and request sensitive documents.
Entering New Markets
By leveraging new insurance technology trends, insurance companies can gather data on demographic groups, residents of certain zip codes, and consumers that have common characteristics. In turn, they may determine the risks involved with entering a new market (such as by servicing a particular city or catering to those who belong to a specific age group) by looking at data that reflects their behaviors and habits.
Keep in mind that some of the most prevalent insurance technology trends allow real estate professionals and individual property and casualty (P&C) agents to manage their risks, as well (and not just insurance companies).
8. Automated & Drone Appraisals
Real estate professionals and P&C agents can deploy drones to accurately evaluate a property’s structure and general condition in a more accurate way than traditional assessments do.
In fact, because this is one of the most popular insurtech trends in 2023, there are various products for drone inspections that come with sensors, thermal cameras that identify heat sources, and features that enable them to access hard-to-reach and narrow spaces.
Here are some of the main advantages that are attained by utilizing drones for property inspections:
- They give inspectors an accurate view of roofs, towers, and other areas of a property that are difficult to reach in person.
- Inspectors minimize their risks of getting seriously injured by using a drone instead of climbing a structure with a rope or ladder.
- Drones can enter tight spaces that are difficult for a human to get into.
- A drone could be deployed to inspect an area with hazardous and harmful gasses or chemicals.
- Certain types of drones are capable of detecting heat and pressure that humans can’t manually identify.
- Drones that are equipped with multiple high-resolution cameras are less likely to miss capturing a spot or make an error in comparison to a human.
It goes without saying drones allow professionals to save time on performing these tasks manually since these pieces of equipment could fly and are directed by remote controls from a distance.
9. Property Information & Data Aggregation
This is also one of the technological trends in the insurance industry that enables P&C agents, assessors, and real estate professionals to save plenty of time.
To clarify, there are software products that automatically gather and aggregate data about a specific property from various online and offline sources. This includes:
- The sales history of a house and a list of its past owners.
- Information about its current owner.
- The property’s size.
- A home’s repair history and structural condition.
- The number of rooms, windows, garages, and similar features that are in a house.
- Whether there are any tax liens or unpaid debts that are associated with a given property.
These tools are very valuable since they permit interested parties to forgo the traditional ways of collecting this information. For example, a P&C agent who is considering insuring a house doesn’t have to look through different state, county, and municipal records, nor do they need to visit government offices in person to access details that aren’t available online.
Above all, some of these tools, such as those provided by PropertyScout.io, are updated on an ongoing and real-time basis.
10. Real-Time Data Analysis
Each property dataset may be updated at a different time. That is to say that certain transactions could be up-to-date when obtained from one source (for example, a municipal government), but another would delay recording them (the state government, for instance).
With that in mind, one of the most advantageous trends in the insurance industry is being able to obtain property records that are updated on an ongoing, real-time basis. This allows insurers, real estate agents, and appraisers to get the latest and most accurate information on a property, including sales, repairs, mortgage balances, and tax or involuntary liens.
Moving Forward & Leveraging the Top 10 Insurtech Trends in 2023 and Beyond
Whether you’re an insurance or real estate professional, this article should give you an up-to-the-minute idea of what the top insurance technology trends in 2023 are.
Next, consider how you (or your firm) could leverage these trends. Do you want to use AI and ML technology to streamline your processes and boost productivity? Would investing in a drone or aggregated, real-time property reports be worth the money and effort that you can save? How will embedding a paywall or chatbot into your website enhance your efficiency? Maybe you simply want to stay ahead of your competitors by learning about the top groundbreaking insurtech trends in 2023.
Either way, by reading this list, you now know what the latest trends in the insurance industry are, as well as how they are currently transforming the sector and will continue to do so for years to come.