Why InsurTech Is More Than Just an Industry Buzzword
Education and Careers InsurTech is poised to change the insurance landscape, which can be good for business and consumers.
Todd Greenbaum, CEO, Input1
What technology trends have you noticed in the insurance industry?
There are many emerging technology trends in the insurance industry. These include most notably completely electronic insurance rating, purchasing and policy issuance systems; mobile portals for billing, endorsement and document retrieval, which allow for extensive customer management of the product; big data analysis and understanding trends to deliver more targeted pricing; artificial intelligence applied to claims reporting and customer service in the form of chatbots; and internet of things (IOT) for products such as vehicle tracking, leak detection, fire prevention and crime prevention etc.
What are the biggest mistakes insurers make in their process?
Carriers move too slowly when confronted with change and, despite the additional time it takes to make a change, their research is often inadequate. Carriers often don’t understand how long a new initiative will take to launch and therefore frequently underestimate the time and dollars required to bring the new initiative to market. They need to deploy better resources when evaluating enterprise-level changes and make more informed conclusions in shorter periods of time.
How can technology improve processes for businesses and help them succeed?
Insurance carriers will experience exceptional efficiencies, cost reductions and customer satisfaction by maximizing the customer management process. In precisely the way that banks now allow customers to view and update their account information, deposit funds and make loan payments remotely and deliver documents electronically, insurance carriers will realize benefits from a better and more inclusive customer management of the product lifecycle. Move the mundane tasks from humans to machines and free up the humans to tackle the more complex, time sensitive and visible customer requests.
InsurTech is an offshoot of “FinTech,” which refers to technology shaping the financial world, including banking and payment systems. Now similar technology is emerging in the insurance industry.
A $2.6 billion-dollar business, InsurTech isn’t going away. It’s only getting bigger.
While many insurance companies might like to continue doing business as usual, new technologies are set to revolutionize the industry. Companies embracing InsurTech may prosper while those that don’t may get left behind.
Disrupting the status quo
According to a 2016 Global FinTech report by PwC, a network of firms in handling assurance, advisory and tax services, three out of four insurers predicted FinTech would be a disruption to their business within five years. Yet only 43 percent of those insurers reported making tech part of their corporate strategy.
In its report, PwC urges insurance companies to “embrace the revolution” and strategically define their path forward. They suggest exploring new trends and innovations, strategic partnerships, involvement in InsurTech startup programs and new product development.
Digitally savvy consumers want the innovation, convenience and discounts that often come with new tech.
Many of these emerging technologies are personalized to the customer and particularly to millennial customers. For example with car insurance, customers can get insurance quotes simply by sending a photo of their driver’s license and the car’s vehicle identification number. Other InsurTech examples include usage based “pay-as-you-go” insurance and microinsurance.
Insurers need to address how to handle risks of emerging technologies such as car-sharing and vehicles with self-driving mode. Both of these areas show strong consumer interest and growth.
New technology can also provide insurers with useful data about their customers that can help them tailor their products to the customer.
For example, fitness trackers, known as sensor technology, can help monitor a patient’s health. Better health could mean lower health risks and lower premiums.
Many consumers are open to wearing a fitness tracker, especially if they are incentivized with things like free or discounted gym memberships.
PwC says sensors will help predict, prevent and mitigate risk. They say insurers can use that data to underwrite policies without even requiring physical exams.