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The widespread availability of real-time data, the instrumentation of datasets, diversity of data sources, and the emergence of cloud computing have transformed insurance operations. Today, the digitization of insurance operations warrants innovative methods of visualization and contextualization of data from both digital as well as physical assets. Digital twins help modern insurers optimize core insurance processes, prevent damages preemptively, assess disaster readiness, and gain the most out of data. This article will explore 4 keyways digital twins boost the insurance sector in 2022.

A quick analysis of heterogeneous datasets

Digital twins can work on virtual simulations and real-time data streams to simplify the insurance underwriting process. Real-time analysis fosters a better understanding of different scenarios and associated pricing risks. These include the analysis of rarely occurring scenarios or incidents like floods, earthquakes, vehicle issues, house fires, heart attacks, and a host of other catastrophic mishaps that enable underwriters to create better premiums. For commercial line insurers, digital twins unlock premium customization opportunities to match changing workforces, premium audit reduction, and more effective processing of workers’ compensation.

Enhanced personalization of service and offerings

Digital twins offer insurers a comprehensive view of market volatility by creating virtual replicas of external events that impact assets and decision-making, insured assets, and customer habits. The simulation of consumer behavior patterns helps replicate and understand search habits, shopping data, and other online activities. This allows for a better understanding of the overall customer journey and personalization of products and services across an omnichannel spectrum.

Accidental impact assessment

Digital twins can replicate scenarios or incidents leading up to a claim or an appeal. Accidents and other events can be simulated to evaluate its impact on the claimant’s property or possessions. The enables the precise calculation of the insurer’s liability without having the need for an expert examination. Overall, this helps insurers fast-track claims processing significantly and shorten the claim cycle by up to 400%.  

Countering insurance fraud

The Coalition Against Insurance Fraud (CAIF) reports that the annual toll of insurance fraud on US consumers amounts to $80 billion resulting in higher premiums with direct implications for the insurance customers. Digital twins can be instrumental in countering this. The incident replication capability of digital twins empowers insurers to assess claim accuracy by the comparison of actual data with simulated data. This helps detect claims inconsistency to reduce the liability of the carrier and save costs.