Insurance

Changing the Way Insurance Companies Do Business

One of the most significant changes technology is changing is in the insurance industry. As technology is changing the insurance business is changing. The following is an article comparing how technology is changing insurance in three ways. This article will also explain technology and its impact to the insurance industry.

The first technology is creating new risks that the industry is unprepared for. For example, technology is changing how insurers collect and manage customer information. In the past, insurers would create systems that accessed customers’ private data via a phone call or other direct contact method. Nowadays, with more consumers using mobile phones and interacting through social media, insurers are finding that many of their customers are turning against direct contact. This is creating new risks in the insurance industry.

Another way technology is changing insurance is through fraud detection technology. With the implementation of the Enhanced Loss Prevention Plan (EPLP), more life insurance companies will be required to collect and verify more health information about their clients. According to Josephheit, senior vice president and chief risk officer of Allstate Life Insurance Company, “The day of paper and pen is long gone. Now, we’re at the point where technology is changing the way we do business.” As per Kurt Campbell, managing director of consumer and niche investment group Accuidian Investments, “The days of relying heavily on telephone contact to monitor our claims are coming to an end…The days of cold calling to collect contact information from potential customers are coming to an end as well.”

Insurance companies need to update their technology to adapt to the new type of consumers they are serving. According to Insurance Information Institute, “The new types of insurance available are much different than the types that were available in the past. For example, medical and prescription drug plans have become a leading source of income for insurers…Substance abuse programs that were considered untouchable two decades ago are now being analyzed for their benefits as a means of reducing the number of injuries caused by substance abuse.” Additionally, with the introduction of EPLP and the ability to electronically submit medical and other claim documents, consumers can easily receive them via the internet.

The introduction of nobi, or electronic health records, has created new opportunities for insurance companies. According to Richard Combs, senior vice president and CFO of Allstate, “Nobi is changing the way that insurance is recorded and handled. It’s important for us to evolve with the times, and technology is certainly one of those areas where we need to stay ahead of the curve.” Although, he acknowledges that “nobi” provides insurers with “a security that their records won’t be tampered with, and it eliminates the possibility of unauthorized entry, which could compromise our patient’s privacy,” he notes that more companies are considering the benefits of nobi than ever before.

According to J. Stephen Lanning in his book, New Technology and the American Family, “Americans are changing more of their personal routines than ever before. And as physicians continue to use technology to streamline the practice and make treatment more streamlined, Americans are also changing their insurance policies more frequently…In the past, when people changed jobs, or moved, their insurance policy stayed the same for a time. Now, when individuals change jobs or move, their insurance policies frequently change.” Although, he notes that “no technology alone can solve all of these issues, no technology by itself will have a significant impact on the number of insurance claims,” he emphasizes the importance of reviewing and revising one’s insurance policies to ensure that consumers are provided adequate coverage.

As technology is changing the way insurance companies do business, consumers need to stay informed about the changes. To help keep up with the pace of change, many consumers turn to the Internet, which has become an invaluable tool for staying current on news and industry trends. Consumers can receive up-to-date information on new advances in medical practices and insurance products from a variety of sources, including blogs, articles, and online newsletters. They can also learn about which insurance products are best suited for their needs. And they can often purchase insurance online, making the process even easier.

While technology is changing the way that insurance companies do business, consumers have the power to affect how that change occurs. Insurance bylaws protect consumers from being tricked, harassed, or misled by insurance company representatives or brokers. So long as consumers pay attention to what’s going on in the world of insurance, they can work with their insurance company to develop the best care possible.

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