How InsurTech is revolutionising the conventional insurance model
As technology is evolving, it is becoming more aggressive in disrupting every facet of the world. And insurance is no exception.
At large, the insurance industry has been stuck in a rut and become resistant to change due to occupying a risk-averse culture. Whilst traditionally being perceived as a stagnant market, ground-breaking technologies are transforming this industry and inspiring innovative opportunities.
Despite the InsurTech sector hitting a record high of $6.37billion in 2019, many are still unsure of what InsurTech really is and how it’s shaping the future of the industry.
What Is InsurTech?
InsurTech, or insurance technology, falls under the wider FinTech sector. It refers to technology leading the operations of insurance firms by leveraging smartphone apps, wearables, claims processing tools, online policy handling and automated processing.
Berlin-based Friendsurance is thought to be amongst the first to use technology within insurance back in 2010, creating a peer-to-peer insurance community stirred by a group of people who longed for a support group in the event of a loss.
Propel back to today, and InsurTech has disrupted its sector so much that traditional insurance businesses are being forced to raise their game to compete in customer service and offerings.
Why Use InsurTech?
InsurTech aims to make the process of obtaining insurance more convenient. It allows businesses and consumers alike to access products and services swiftly, eliminating the age-old annoyances of buying insurance. Smart apps and tracking tools allow individuals to find new benefits and small business owners can shop for different types of coverage all in one place.
“Clients expect to be able to access essential information when they need it, and InsurTech solutions enable independent agencies to provide that 24/7, on-demand experience,” James Thom, Senior Vice President at Vertafore
This subsequently empowers consumers to take control of their insurance. Rather than being enticed by an over-enthusiastic salesperson forcing you to settle for expensive products that don’t tick all the boxes, consumers now hold the power to demand a product that fits their needs.
InsureTech relies on two key components: Artificial Intelligence (AI) and the Internet of Things (IoT), enabling a tailored service for consumers and businesses. AI uses data to efficiently summarise and present the most relevant and useful products specific to every customer, whereas IoT provides insurers with vast amounts of detailed data about customers to offer the right products at the right time.
All of this surpasses the ability of any human regarding time, convenience and offerings.
But It Hasn’t All Been Plain-Sailing
Where InsurTech face a challenge, but traditional insurance firms reign supreme, is in trust and recognition. InsurTech startups rely heavily on goodwill and word of mouth publicity, which is not something that can be granted overnight. They must prove their reliability over a longer period for consumers to see them as trustworthy and transition away from conventional insurers.
Along with the complexity of insurance itself and a preconceived image of being a tedious necessity for most, it can be difficult for InsurTech to sell something that consumers generally roll their eyes at, no matter how good the package may be. This is particularly apparent amongst younger generations, who simply do not see insurance as an important financial investment. This has plagued the industry for decades, and InsurTech must tackle this stigma in order to truly disrupt the traditional market.
The Future is Bright
The ongoing pandemic has paved the way for consumers to turn to InsurTech. The number of people buying online has surged, meaning no longer will insurance policies require a face-to-face meeting.
Some believe there will be a refocus on partnerships with established customer pools, to jump over the trust hurdle and embrace the disruption. Integrating InsurTech products and services with data occupied by insurers is set to see the industry soar, allowing InsurTech to find its feet amongst a rigid environment. One example doing just this is UK insurer, Aviva, teaming up with the startup, Digital Risks, to develop a brokerage dedicated to supplying startups and SMEs with case-specific, monthly insurance subscriptions.
Recruiting In InsurTech
Jobs within InsurTech are steadily growing in numbers within the FinTech space, with more insurance technology employers looking to expand their offerings and grow their teams to respond to increased demand.
Sourcing talent in any technology-related industry is notoriously difficult, and nowhere is this issue more prevalent than in InsurTech. This is where we come in. Our micro-niche consultants are specialists within the InsurTech space, engaging a deep network of highly specialized talent for all your scaling needs. If you are looking to expand your InsurTech business, don’t hesitate to get in touch here.