In 2022, the insurance industry saw a boom in predictive analytics, blockchain data, and chatbots, among other technologies. Economic uncertainty in 2023 has solidified some 2022 tech trends, but also originated new ones to meet the moment. Here are the top 6 tech trends shaping the insurance industry in 2023.

#1: ChatGPT, BARD, and Other AI Tools Gain Momentum

The introduction of ChatGPT and Google’s Bard AI tool democratized AI across various industries in 2023, and insurance is no exception. Industry experts already slated AI as a power player for 2023 insurance, and the advent of ChatGPT and BARD took that even further.

AI is being used to structure and prepare documents faster, giving insurance providers the ability to handle higher volumes of digital submissions. It’s also being applied across underwriting, pricing, and claims processes. ChatGPT is being used to assist insurance teams with contract writing and improving customer satisfaction by assisting in document classification. It also has applications for improving the quality of customer service chatbots and reducing claims leakage.  

#2 Flexibility, Scalability, and Resilience

To minimize costs and drive long-term growth, insurers are eliminating legacy architecture in favor of a simplified, modern technology stack. Many of the more digitally adept insurers are already integrating insurtech into that mix as well. The resulting technology ecosystem is meant to support core offerings that are flexible, scalable, and resilient across the organizations.

For example, automating specific aspects of the claims process to improve efficiencies and reduce manual intervention by internal teams. Or, insuring risk more accurately by analyzing third party data to fill in blind spots. The 2023 insurance landscape demands the competence of these technology stacks to tamp down operating costs and position the company for stable growth if economic windfalls arise.

#3 Behavioral Analytics and Effective Nudging

Behavioral analytics are used to monitor, analyze, measure, and interpret the digital footprint left by users across websites, mobile apps, and digital products. While behavioral analytics are not a new concept, their relevance and growth in the insurance industry is notable.

Insurers are using behavioral analytics more frequently—applying it to optimize digital solutions, increase personalized sales, reduce fraud, and improve both employee and customer satisfaction.

A behavioral science approach called nudging has proven particularly effective. Nudging uses subtle, non-coercive interventions to guide people towards better decisions while respecting their freedom of choice. For example, McKinsey highlighted a successful use of nudging in a recent article. A German multiline insurer pulled insights from behavioral analytics to alter the language they used to explain a cost-effective service offering. As a result, more than 30% of customers accepted the offer, up significantly from the small minority of claimants who had accepted it in the past.  

#4 Customers Choosing Telematics

Sensory technology from wearable devices and vehicle monitors is a growing insurance tech trend that’s not going away. People are opting for plans that analyze the data from these devices to better inform their insurance policies and hopefully lower their premiums. In fact, as of 2022, all of the top 10 auto insurance companies are offering telematics solutions.

Expect telematics to continue as an insurance tech trend. A recent survey of nearly 2,000 adults confirmed interest in it. In the survey, 30% of respondents weren’t currently taking advantage of telematics-based insurance policies but were highly interested in trying it. A further 69% expressed at least some interest in participation.

#5 Unstructured Data Analysis

Insurance analytics traditionally rely on the structured data of forms, policy information, claims data, and financial data to draw conclusions. But the proliferation of unstructured data is on the rise. Unstructured data includes data from social media, multimedia, claim notes, images and videos, and medical records (for medical insurers). Technology like IoT is giving insurers a method of mining and analyzing this data to build more robust customer profiles. For example, using social media data to detect fraud and communicate with customers.

#6 Big Impacts of the Metaverse

The metaverse is still a novel concept, but its influence is growing rapidly. For insurance, this tech trend will have the biggest impacts on handling plan coverage and identifying risks. It will also offer potential opportunities to the insurance value chain.

The insurance industry has a lot to think about when it comes to the metaverse. People will be using this technology for numerous reasons, and insurance must be ready to respond. For example, the metaverse economy will be built on virtual currencies like NFTs and crypto. Insurance companies will be expected to provide coverage for assets in the metaverse to cover these kinds of transactions. Avatars and immersive experiences will allow insurers to communicate with users and create more tailored experiences to increase awareness around insurance-related services. When it comes to governance, the laws and regulations of the metaverse are constantly evolving, and insurers need to identify what they can an cannot do there.

Meanwhile, the metaverse presents numerous and varied opportunities. Insurers can use this tech to develop new products for risks specific to metaverse users, engage in sales activities via immersive experiences and avatars, allow customers to pay premiums and receive payouts via crypto assets, and utilize digital twins in the metaverse to conduct damage investigations.  

As with any technology though, there are risks of hacking, unintentional infringement on real-world rights, unintentional leaks of confidential information by users, etc. Insurers must proceed with cautious optimism.

Tech trends for the insurance industry are ever-changing and evolving with the advent of new technologies and the changes to social norms. It’ll be interesting to see how this industry adapts through the remainder of 2023 and into the future.