This looks like to a routine and established business practice nowadays however dealing with this dynamic nature of insurance risk profile has made the entire insurance servicing industry rethink about their product and tech strategy. A car driver covered under personal auto insurance needs to be covered under commercial auto insurance, the moment the driver decides to turn the Uber app on. This changes the driver risk profile instantaneously and demands the need to cover the driver under the new risk profile with an appropriate insurance product with the same person and vehicle profiles. Another similar example is a homeowner renting out a room to an Airbnb customer. This very nature of new, dynamic business models and the need to provide an appropriate insurance product to cover the risk real time and accurately is creating this revolution in the insurance products and tech world.
So what’s the underlying technology required to create these new insurance products and provide an infrastructure to calculate accurate risk profile and deliver real-time information such as quotes, data required to reduce risk/premiums and accurate assessment of an insurance claim. The four basic components of this new technology are
- Real-time data acquisition and streaming
- AI-based risk algorithms
- Providing an API based infrastructure to deliver the information
- Rich, Configurable/responsive mode of data presentation.
Let’s take a look at each of these components in detail.