A 2020 IBM survey shows that 50% of Millennials don’t have life insurance and, of those, nearly 70% cited confusion, lengthy processes, and complicated application requirements as the main hurdles preventing them from purchasing an insurance policy. The same goes for the nearly 20% of Millennials who don’t have medical insurance.
But InsurTech companies, like Bowtie medical insurance, are reshaping the insurance industry, making it more efficient, customizable, transparent, and accessible to younger generations.
Traditional medical insurers have built a long-standing reputation for being highly bureaucratic and risk-averse – which often prevents them from offering their clients a compassionate and conscious service.
But InsurTech, and the Millennials-driven demand for a more customer-friendly service, is disrupting the industry. According to a PWC study, nearly 75% of insurance companies today expect one or more aspects of their operations to be drastically impacted by the advent of FinTech solutions.
Today, Millennials are looking to interact with their insurer on their own terms, access and store information on their mobile, and review their policies through user-friendly apps and platforms.
Overall, smart insurance tech solutions are enabling clients to enjoy a streamlined experience – which is no longer so different from online shopping!
For insurers, most of the risk involved with underwriting a policy derives from the difficulty of foreseeing or predicting a certain event. In most health insurance cases, the risk – and, therefore, the premium and costs involved – are determined through a medical exam or questionnaire.
But Big Data is reshaping the way the underwriting process takes place. Thanks to Big Data technologies, insurers can now access large datasets that make future events more predictable.
For example, the risk posed by a certain medical insurance contract can now be established by reviewing the information about individual customers.
Additional data – including the information that comes from a person’s Apple Watch\’s Health App or other telematic sensors – can help insurers track a client’s behavior, fitness habits, and lifestyle choices. And, Millennials are the leading generation for technology adoption.
When choosing a health insurance plan, price, network coverage, and coverage limit are top priorities for buyers. But accessibility and efficiency of policies and processes (including filing a claim) remain a major pain point for most clients.
New InsurTech solutions aim to improve insurers’ operational efficiency by:
Streamlining customer onboarding – including generating online quotes and policies outlines.
Eliminating the need for complex bureaucratic processes – thanks to tech solutions (including apps and user-friendly platforms) customers can manage their policies digitally, without the need for lengthy paperwork or in-person meetings.
Managing claims – customers can submit and manage their claims online, which can then be handled by AI. This allows insurers to invest time in building relationships and provide a more compassionate and stress-free service to customers.
Artificial Intelligence is bound to play a vital role in many aspects of the new, InsurTech-driven insurance industry. Thanks to AI, insurers can analyze big data sets and gain valuable insights.
Additionally, AI can speed up and streamline the entire underwriting process. For example, in the case of life insurance policies, today’s customers would have to face a 6-week long, exam-based process to access lower costs and higher benefits. While no-exam policies are available, they often come with limited coverage and high premiums.
But AI is reshaping this aspect, giving insurers and customers the chance to make the underwriting process simpler and quicker – but just as accurate.
The same IBM survey outlining the relationship between Millennials and their insurers also offers valid insights into what could improve it.
According to those surveyed, 70% would consider buying insurance if the processes and policies offered to them were clearer and easier to understand. On the other hand, over 65% of them look for quicker and more accessible application processes.
InsurTech solutions have enabled an industry-wide transformation and are helping providers become more customer-first and transparent.
User-friendly apps also give the chance to Millennial clients to access information about their coverage, get their most frequently asked questions answered, and better understand the ins and outs of their policies.
While accessibility is a top priority for millennial consumers, customization is even more important. InsurTech solutions are providing high levels of customization potential – in more than one aspect.
Firstly, insurance tech solutions leveraging data science can help insurers craft policies tailored to a client’s unique health needs.
After all, new studies show that nearly 50% of Millennials suffer from chronic health conditions. And, only around 56% of users between 26 and 41 years old deem their mental health “very good” against 70% of Boomers.
Additionally, InsurTech allows insurers to add custom touches to their interactions, including policy renewal reminders, personalized features, and health suggestions.
Ultimately, this transformation of the health and medical insurance industry is driven by and catered to millennials, and it is bound to evolve alongside the new generations’ need for more accessible, tailored, and compassionate coverage.