Insurance in 2022: New Types of Coverage Call for New Claims Technology
The types of claims that need to be adjusted today differ significantly from the traditional world of insurance. Insurance and insurtech companies will need to rely on AI-powered software that will continue evolving as their needs do the same.
The landscape of insurance is changing. A wide variety of cutting-edge technologies and trends are creating new risks that need to be insured—developments such as drones, cyber risks, scooters, and even downtime for cloud infrastructure. As a result, the types of claims that need to be adjusted today differ significantly from the traditional world of insurance.
As insurance carriers adapt to this new reality, much of the necessary innovation in terms of the underwriting, distribution, and pricing of insuring today’s new risks is being driven by insurtech companies. Meanwhile, claims managers find themselves frustrated as the claims software that they know and are used to has never adapted to this new world. Written before drones existed, it has never changed enough to handle today’s new lines of business.
That presents a dilemma for insurtech companies that have plenty of technological talent and know their business very well: License software that is inadequate to their line of business and way of work, or develop their own, in-house software to handle claims?
That is precisely the question that many insurtech professionals find themselves asking. But in 2022, this is no longer the critical question they need to be asking about today’s crossroads in the use of insurtech. Instead, they should be asking whether they can entirely avoid the tradeoff between inadequate software and a massive technology undertaking—and if so, how?
Why innovative technology is the (necessary) solution to novel challenges
Why is the choice between licensing outdated software and developing new solutions in-house such a problem for insurtech companies? In part, it’s because the realm of claims handling is far different from other parts of the insurance value chain; it is filled with regulation, it can involve a great deal of interaction with customers, and it demands nuanced processes. It is particularly challenging at this point in time, as many claims leaders are finding that outsourcing claims is no longer a viable option for them, heightening the need for a platform that suits these companies’ artificial intelligence claims-processing needs.
So, can insurtech companies and insurance carriers avoid this tradeoff? Can licensed software offer these companies the flexibility they need to streamline their process of handling claims? And can this software also minimize the risk of claims leakage?
To address this challenge, it’s important to keep in mind that the world of insurance will undoubtedly need to continue innovating and offering new types of coverage in the future. To streamline the process of adapting to innovations that we can’t yet predict—and to provide real-time insights and guidance to employees regarding novel types of insurance—insurance and insurtech companies will need to rely on AI-powered software that will continue evolving as their needs do the same.
How we know software can meet this evolving need
The types of technologies that can make this type of software a reality are already out there. Offering a licensed software solution to meet the ever-changing needs of claims processing is largely a matter of bringing today’s most advanced cloud- and machine learning-based technologies to the realm of insurtech.
We at Five Sigma understand that, because that’s exactly what we’ve done in building our platform. That platform leverages new technologies like SaaS, microservices, and artificial intelligence to provide unprecedented flexibility.
At Five Sigma, our platform enables insurance and insurtech companies to configure a claims platform to serve their unique needs. Microservices with open APIs make it possible for new software to tap into a huge ecosystem, making it easy to adjust that software to match operational processes needed by new lines of business. AI and machine learning further make this process automated and adaptive. On top of that, continuous deployment with seamless, weekly release cycles allows these rapidly growing and constantly evolving companies to make sure that the automated communication software we provide will always match their needs.
This is one of the reasons we at Five Sigma are so excited about the future that claims management holds and the opportunities we can address with our unique platform. Built from the get-go with AI and microservices architecture in mind—and specifically tailored for the claims management industry—our platform is uniquely positioned to help specialty carriers to get the best of all worlds.