The Future Of Home Fire Insurance: Technological Innovations

The Future Of Home Fire Insurance: Technological Innovations – By mid-2020, insurers were bracing for the worst. The pressures of the COVID-19 pandemic and the resulting economic turmoil were pushing many industries to the brink of collapse. Wildfires ravaged the world and the Atlantic has seen the most named hurricanes in recorded history.

However, by the end of the year, most insurers found that the bottom had not fallen. Some segments of their business were, in fact, doing very well.

The Future Of Home Fire Insurance: Technological Innovations

In the spring, for example, car claims declined sharply as more and more drivers chose (or were told) to stay at home, and in the summer, more customers sought out policies that fit their new socially distanced lifestyles.

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“People were buying boats, trailers, second homes because they needed something else to do,” Crystal Johnson, a managing director who works for State Farm, said in an interview. “Across the industry, we have seen the number of policies grow.”

Volatility—predicting and protecting against it—is the business of insurers. However, in one of the most unpredictable years in recent memory, when results for both operators and the rest of the world exceeded expectations, the companies that did best tended to have a few things in common. For many, these practices helped them succeed even before the world turned upside down.

The successful operators were the ones that diversified, both in their mix of lines of business and in geographies. And these carriers were innovative. They embraced technology to manage not only their increasingly complex books, but also their increasingly distant workforce.

“Insurers are really trying to rethink their customers’ needs, be more transparent and simplistic with their offerings, and create more voluntary products rather than commodities,” Bea Elbert, global general manager of insurance, told Industrious. “After last year, insurance has taken on a whole new meaning.”

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Even before the pandemic, leading insurers were employing AI and automation to improve efficiency and accuracy in claims processing. They were at the forefront of customer service at a time when pandemic stress increased the urgency for quick processing and refunds.

“Insurance companies that, say, have the digital technology to do image-based processing that can help quickly assess damage to a car or a house remotely – they are doing much better than those that don’t.” , explained Girish Ratnam , who leads the insurance application innovation team in North America.

He points to some carriers that have even deployed drones to help quickly survey disaster areas. And then there’s the proliferation of features built into insurance apps and websites that allow consumers to upload their own photos and videos — a time-saving feature at regular times and a safety feature during COVID times.

This automated technology can also empower claims adjusters in the field, especially when it’s preloaded on their mobile devices and apps. Whether visiting a disaster site or reviewing a routine claim, experts can provide customers with answers in a matter of minutes.

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“Claims adjusters can now have everything at their fingertips,” explains Eddie Gaehwiler, managing director working at Allianz. “They can look at the device and say, ‘Okay, this is the information I need. This is what I can offer you: ‘They can settle the claims right there’ without spending time and money reporting to the office.

During the pandemic, savvy insurers have also looked for ways to make applying for insurance and filing claims as simple as possible. The key has been the expansion of mobile-friendly digital platforms.

“We’re working with insurers to improve their customers’ digital experience so they can do everything with a single click instead of five,” said Ratnam.

However, people still have a key role to play, especially when it comes to customer service and complex complaints. That’s why it was so important for insurers to establish new ways of working remotely without dropping all the balls that the pandemic was throwing at insurers.

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“When you’re going to spend money on insurance,” points out Johnson, “sometimes you want to get validation from a human contact.”

S&P Global found that automotive and medical claims had a “positive impact” on insurers’ claim rates, thanks to strict lockdown measures. Less driving and less elective surgery meant less wear and tear and accidents (whether in vehicles or bodies).

Less successful segments included real estate policies, as a result of record fires and hurricanes in the United States – not to mention the reality of people spending more time in their homes, noticing and causing more damage. Helping customers move forward with repairs proved difficult as demand for building materials skyrocketed as the pandemic caused major supply chain disruptions.

As with customer service, the right technology capabilities can help insurers thrive even when their lines of business perform poorly. It’s a big reason why a diversified portfolio is more important than ever.

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Insurers have long sought different types and geographies of coverage to spread their risk. Scale now brings an equally important advantage: data. The larger the customer base, the deeper the data lakes operators can build to store and analyze customer information. This analysis can provide information to guide decisions, including dynamic pricing and sales opportunities.

Eventually, Ratnam sees a future where insurers can use data to track not just customers but also new business partners – like building goods suppliers or car manufacturers – so that insurers can prepare in case of new demand or outages. .

“Supply chains are rarely talked about in insurance circles,” said Ratnam. “This year was a year where they are starting to take a look at that.”

Insurers can also use data analysis to determine opportunities for new products and services, covering everything from cybersecurity to prepaid car insurance and home care for the elderly. This is critically important as major insurers face disjointed start-ups intent on disrupting the insurance landscape.

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“After the ups and downs of 2020, insurance will never go back to just being a reactive industry,” said Elbert. “Insurers will be more proactive for their customers.”

One place where the past year has seen decided ups and downs is in financial markets. Fortunately, the ripple effects this can have for insurers can also be mitigated by the right technology.

Two issues are creating notable pain in the coming year. Lower (and in some cases negative) interest rates continue to hurt returns, while pandemic-related budgetary headwinds could hit insurance customers hard in 2021, leaving them with little recourse but to cancel existing policies and postpone news.

Consequently, cost reduction will be a top priority for insurers this year as they look to bolster earnings and reignite share prices. Automation can also help here by reducing expensive manual processes. AI analytics are helping predict future needs and challenges, helping insurers plan ahead and avoid costly mistakes and miscalculations. Process outsourcing, both through AI and large-scale partners like , is another promising path

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“With hundreds of insurance customers around the world, we have the economies of scale as well as the technology to deliver smart, cost-effective workflows,” explained Gaehwiler.

These savings help insurers not only weather the short-term economic storm, but also free up resources to further invest in the customer experience and ongoing digital transformation.

“Reducing costs and ensuring a wonderful customer experience will be incredibly important for insurers to remain agile and competitive,” said Johnson. “Underpinning those two things is data and AI.”

While things may be looking up in 2021, if the past year has taught insurers anything, nothing is guaranteed — least of all the technology that helped prepare for the unexpected.

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