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5 Ways Technology Is Changing the Insurance Industry

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Brad Anderson


It’s natural to link technology and artificial intelligence to industries like telecommunications, marketing, and manufacturing. In the insurance sector, perhaps not so much. Clients still receive cards in the mail, meet with agents in their offices, and speak with adjusters for claims. Yet technology is transforming the way insurance carriers provide coverage and how policyholders receive service.

Technological advancements are starting to automate and predict standard insurance-related tasks, from filing a claim to adjusting a policy’s coverage. As the industry embraces things like artificial intelligence, machine learning, and other technologies, the relationship between providers and clients is also changing.

More efficient processes and data analytics won’t necessarily remove the human touch. However, these advancements will increase accuracy, make information more accessible, and have the potential to greatly enhance carrier-customer interaction. From the perspectives of insurance providers and clients, there are five ways tech is revolutionizing the insurance industry.

1. Artificial intelligence is providing faster claim estimates.

Typically when a policyholder files an auto claim, an adjuster needs to be present to assess the damage to the vehicle. The customer initiates a claim online or over the phone and must wait for the adjuster to meet them. An adjuster looks at the car, takes note of the defects and losses, and comes up with an estimate. That estimate may take several days, extending the time from the client’s initial contact to payment.

Meanwhile, the customer is likely without their car or stuck in a vehicle with visible damage. Artificial intelligence is speeding up the time it takes for insurance carriers to provide and process estimates. Instead of waiting for an adjuster, policyholders can instantly use apps to take pictures of the damages they need to repair. An AI-based algorithm comes up with an estimate within seconds. This allows insurance companies to get money to the policyholder or repair shop in a more timely manner.

2. Telematics is determining premiums.

Telematics may not be a familiar term to many insurance customers. But they may know about this emerging trend in auto insurance premiums from their current carriers. Some insurance providers send bill messages and emails touting a new technology that tracks customers’ driving habits. It’s a monitoring device that goes into a car and records a driver’s habits.

These devices are used to collect data, including locations, speeds, driving distances, and accidents. Insurance carriers then factor in this information to determine individual premium costs. In theory, aggressive drivers and those who log more miles could end up paying higher premiums. Conscientious customers and those who drive less will pay lower rates. Telematics boosts risk assessment accuracy for providers and rewards drivers with good track records.

3. Drones are assessing damage.

In general, the use of drone technology is on the rise across many industries. Current projections indicate the market will reach a value of more than $63 billion by 2028. Estimates also reveal the market’s compound annual growth rate from 2021 to 2028 will be approximately 16%. The insurance industry is already contributing to that growth by using drones to assess damages. Homeowners who file claims for roof or storm damage may soon be surprised to see a drone flying over their properties.

Instead of relying on roof inspectors, insurance carriers can send drones to take pictures of hail and wind damage. Using drone technology increases these assessments’ efficiency, accuracy, and safety. Providers can use drones to get to areas that are inaccessible to humans after substantial storms. This technology also has the potential to capture damage from impractical or dangerous angles that humans can’t reach.

4. Machine learning is automating claim forms.

Filing a claim after a car accident or major emergency can be nerve-wracking. Anxiety and shock might make it challenging for customers to remember critical details, such as the event’s time. Going over a form’s details online or with a person could be too much for a policyholder to handle and often contributes to added stress. However, insurance carriers often stress the importance of filing claims immediately.

Machine learning removes some of the burdens customers may experience during the claim process. Pre-populated forms with data from a client’s history and policy eliminate the need to repeat information. Machine learning reduces the chance mistakes will occur during the filing process and increases efficiency. Even minor claims like windshield repairs are streamlined as contractors file claims for customers using their policy numbers.

5. Social media is making customer service more accessible.

No one wants to wait on hold or spend hours wondering if their insurance agent got their message. Before social media and chatbots, this was the reality for most policyholders waiting for a phone call. Asking a question, trying to take out a new policy, or making changes to existing coverage could take weeks. But now that insurance carriers are on most of the top social media platforms, receiving customer service has become easier. Chatbots and email can also be ways for customers to get help when needing quick answers to things like policy and coverage questions.

Research indicates messaging is now ranked second among the customer service channels consumers use. Chatbots and instant messages on social media can address routine questions about updating addresses, changing deductibles, and filing claims. A customer can send direct messages on social platforms and get same-day responses. Often, carriers can provide solutions within minutes or at least get the ball rolling. Satisfaction increases as customers get better service.

Technology in the Insurance Industry

Technical advancements are influencing the way customers and businesses interact with each other in several industries. Insurance is one of those, as carriers integrate technologies like AI telematics, and machine learning into their business models.

Providers and customers alike stand to benefit from these improvements since coverage and service are becoming more precise. Not to mention simplifying processes and increasing accessibility. Human-to-human contact will still play an important role, but technology is here to stay and will continue to play a role in upgrading the overall customer experience.

Featured Image Credit: David Peinado; Pexels.com. Thank you!

Brad Anderson

Editor In Chief at ReadWrite

Brad is the editor overseeing contributed content at ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase. You can reach him at brad at readwrite.com.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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Google eyed for $2 billion Anthropic deal after major Amazon play


London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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