FinTech: Its Impact on the Insurance Industry
FinTech, i.e. financial technology, has long been associated with the banking and financial services sector. While that is not incorrect, it does serve to severely restrict the scope of this phenomenon and what it can do for businesses and the customers they seek to serve. Take the insurance sector, for example; did you know FinTech has come to play a rather important role in this sector, allowing companies to speed up the application process, adapt their business to an evolving market, and so much more. We have listed some of its biggest advantages for the insurance sector and how it helps customers’ requirements and paint points.
1. Optimize claim filing process: Unfortunate as it may be, the truth is that filing a claim for an insurance policy is not the easiest task. However, thanks to FinTech most insurance companies have been able to tend to this particular pain point for customers by the means of apps and such that allow customers to file claims in a few minutes at maximum. Such services not only render the process much simpler, but also help make it easier to share the requisite information with the insurer, be it pictures, documents, or others.
2. Tailored policies: One of the biggest reasons why people shy away from getting insurance is the cost. No, research has demonstrated that assertion; according to a study in 2019, nearly 74 percent of adults that hadn’t been insured said they are unable to afford the cost of insurance.
Other reasons include the belief that the policies just don’t meet their requirements. So, how can FinTech help with this? As you can imagine, such tools, further fortified by new-age technology and algorithms, can identify applicants’ unique insurance requirements, their financial status, etc. to help put together policies that are tailored to fulfill their needs in the best possible manner. Of course, it then helps the insurance company get better business and sales.
3. Automate underwriting: We don’t have to tell you just how important underwriting is to insurance. Now given that it is a foundational element of the sector, FinTech has a role to play in this regard as well. AI-fortified FinTech tools can analyze customers’ profiles based on their history, records, and other information and data points relevant to the effort. This not only helps make data-driven decisions but also aids with the elimination of any bias from the process. It also speeds up the process of underwriting by determining a customer’s qualification and then alerting human agents to complete the approval process.
It is not news that the arrival of FinTech has had a groundbreaking impact on a variety of industries, including retail, banking, etc. Similarly, it stands to revolutionize the insurance sector — further demonstrated by the above discussion. So, as modern tools such as artificial intelligence, machine learning, mobile apps, and countless other technologies become increasingly prevalent, it wouldn’t be a stretch to assume that they will have a considerable effect on the insurance industry as well. To cut a long story short, if you too wish to jump on the FinTech bandwagon and take your insurance business to the next level, the next step would be to find a trusted provider for custom FinTech software development services and get started on developing a solution for your company ASAP.
