Big Tech and big data have the opportunity to remake entire industries.
The Bank for International Settlements (BIS) noted in its Aug. 31 paper, “From Clicks to Claims: Emerging Trends and Risks of Big Techs’ Foray Into Insurance” that some of the giant platforms operating around the globe are ones that “can bring benefits to consumers.”
“Big Techs can contribute towards closing the protection gap and to financial inclusion through efficient and low-cost distribution channels, improving customer experience via user-friendly digitalized interfaces and enhancing the digitalization of insurance operations,” the paper said. “In addition, they may offer innovative products to fill market gaps identified using their strong data intelligence on customer needs.”
But the BIS also cautioned that the “increased complexity of service provisions and concentration risk may not be adequately addressed” with current frameworks, so “a new Big Tech-specific regulatory approach might be warranted.” There’s risk inherent, too, as the paper contended there’s a “tendency towards excessive concentration in the provision of both financial and technology services.”
The insurance sector, the BIS added, is being transformed by the integration of insurance products or services into the customer journey as they navigate online platforms through “embedded insurance” that is linked to the non-insurance offerings tied to those platforms. The embedded nature of those interactions can streamline processes as Big Tech companies market and sell insurance products through their online platforms, manage receipts of premium payments, and transmit/assist with the administration of claims payments to policyholders.
PYMNTS data showed an increasing willingness on the part of consumers to embrace digital channels to manage healthcare — and to pay for it all. The report “Healthcare in the Digital Age: Consumers See Unified Platforms as Key to Better Health,” a PYMNTS and Lynx collaboration, found that more than three-quarters of respondents want to pay all their medical bills through online platforms. Payments are integral in the healthcare space, per a separate report on improving healthcare-related money mobility.
The digitization of the insurance industry is not confined to marquee names in Big Tech, or to healthcare. By way of example, past PYMNTS’ coverage of companies such as CCC Intelligent Solutions has illuminated how artificial intelligence (AI), with a nod to auto insurance in this case, is among the key tools automating some of the traditionally paper-based methods of interacting with claims and payments.
During a conference call with analysts tied to the company’s first-quarter earnings, CEO Githesh Ramamurthy said “our clients in the P&C insurance economy are increasingly focused on the need to manage the business through two powerful megatrends: accelerating operational complexity and rising consumer expectations. Last year, auto insurers in the United States paid out over $200 billion in claims indemnity and spent about $25 billion on administrative expenses to handle those claims.”
Ramamurthy noted that over 14 million auto claims have been processed using a CCC deep-learning AI solution.
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