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Insurance as a Service: SaaS set to transform the insurance industry

Sep 30, 2018 | 2 years ago | Read Time: 3 minutes | By iKnowledge Team

Technology will help insurance become contextualised. Higher personalisation ensures better value for money for your risk profile at any given moment.

Insurance as a Service: SaaS - Aegon Life

Today, insurance works in a risk-distribution model where a large population is grouped together and a risk-balanced insurance premium is charged to every member. But a big limitation of this model is that the number of sick people should be considerably lesser than the number of healthy people. Thus, the pool funds the claims and leaves the rest to operational costs and profits.

Now, imagine a world where insurance premium rates and benefits fluctuate every hour according to your changing lifestyle, demands and needs. You still retain a basic insurance that is your home insurance and your automobile insurance, but everything else is now a basic pay as you require in the model. The premium for every ‘add-on’ insurance that you require rises or falls based on your movement, location, or activity. To put things in perspective, your health insurance premium will change depending on your probability of getting sick in a certain location or a certain season.

In other words, your insurance policy is now personalised to you, and has become your personal risk manager, instead of being a generic ‘one-size-fits-all’ policy. If you’re in an accident-prone area, your health insurance, car insurance, and life insurance will get activated and the coverage will automatically be adjusted to the anticipated level of damage that could be sustained if you get into an accident.

Wouldn’t it be great to have your insurance company act as your personal risk manager and cover you from anticipated risks automatically. The magic of this is that you will get personalised coverage albeit at a higher premium but customised to your lifestyle.

How it Changes How Insurance Companies Operate

Insurance as a service changes the standard insurance model from a generic to a very customised and personalised model. But it comes with its own set of limitations, seismic changes to the system and a different concept of insurance. As the concept of insurance shifts to be a service-centric model, mitigation of risk will become an anticipatory model instead of being a preventive one.

In order to get there, companies need to start laying the foundations of their insurance as a service system with the help of the following 3 components:

Customer Analytics

Advanced customer analytics is a key element of personalised insurance policies. Customer analytics can include anything from how a customer behaves to the location and spending patterns of the customer. These details can be further used to personalise the messaging and the solution provided to the customer and to create an intricate and convincing story for the customer to engage them. Advanced customer analytics also help open new channels of interaction and engagement with the customer following the old adage – be where your customer is.

Real-time Personalization

Real time personalization of insurance services attempts on capitalizing the growing social media footprint of every individual. Social media is a treasure trove of information of a certain individual that depicts their activity and behavioural patterns in real time. Using this data to have more contextual insurance solutions that build a more personalized relationship in real time is the goal of real time personalization with respect to insurance. 

Contextual Tools

Contextual tools help you integrate different data points to build a virtual persona of the person in consideration and integrate social and mobile technologies along with deep analytics, pattern recognition and predictive analysis to provide tailor-made solutions to your customers. This will also help you develop products that continually exceed expectations and hence build brand loyalty.

The fact that data is now driving the world around us, is not new. Predictive analysis and risk mitigation through social listening tools are already a part of insurance companies that help in detecting fraud claims and streamline the process for the entire ecosystem. The natural evolution for the insurance sector is growing into a more service and solution oriented customised product that takes into account technologies like Internet of Things, Advanced Social Listening, and Machine Learning. The promise of insurance as a service, pitched as an on-demand model highly customised to every user, is fast approaching, and might be a reality soon. 

Meanwhile, consider purchasing insurance from an agile player like Aegon Life that is focused on innovating and leading the way. The iTerm Plan for instance, offers an astonishing 100-year life insurance coverage, enabling you to comprehensively protect yourself. The plan also can adapt as per your life stages such as marriage and birth of children, allowing you to tailor your protection to your needs of that time in your life.

The world of insurance continues to evolve and become more customer-friendly each year, aided by the role of technology and the willingness of companies to adopt these to serve their customers better.

II/Sep 2018/4435

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