How InsurTech is reshaping insurance industry with emerging technological trends

The goal for every type of insurer—Property and Casualty(P&C), life, health, and more— is to remain competitive and improve speed-to-market while fulfilling evolving client needs. And this is made possible by the industry experts by keeping pace with the Insurtech...

Insurtech

Insurance companies have been progressively embracing digital-first approaches to customer service in response to advancing consumer preferences, particularly millenials and Gen Zers. New technologies empower the insurance space to gather better insights from customer data to help its business operations. 

Over the recent years, the insurance industry has progressively grown in importance as a sector of opportunity for entrepreneurs seeking to address the inefficiencies and lack of customer-centricity in the insurance ecosystem. The industry’s archaic processes make it ripe for innovation and disruption.

The advent of technological improvements like business process automations, chatbots, machine learning, blockchain, and Internet of Things coupled with the analysis of vast quantities of data, have opened the way for tech-enabled insurance platforms and tech providers to help insurers overcome challenges and shortcomings in the insurance industry.

The insurance industry has reacted with new products, new methods of distribution and new ways to evaluate risk each time there has been a leap in technology.

Insurance
Insurtech

The term “InsurTech” refers to the innovative technologies and various digital tools designed to enhance the performance of insurance firms, to deliver a better customer experience, and unlock the potential of advanced analytics.

It has gradually become a powerful driver of change in the insurance industry. As a result of global pandemic and volatile economic conditions, insurance business is readily exploring the benefits of InsureTech. Companies are steadily leveraging emerging technologies and radically transforming the industry by driving these innovations to meet the expectations of next gen customers. Insurtech aims to collect information from a range of sources, like apps and auto monitoring devices including automotive GPS tracking and activity trackers on wristwatches. The information gathered can be used to build more precisely defined risk groups, allowing for more competitive pricing of products.

From claims processing to lead conversions, InsurTech has revamped the conventional processes and legacy systems and transformed the lives of insurers for good by minimizing the human factor, optimizing their performance, and modernizing the industry by investing in InsurTech programs. While Insurtech startups were the first in the industry to leverage these modern technologies, large national insurers are also adopting Insurtech in many aspects of their businesses. 

KEY BENEFITS OF INSURTECH

Stable Business Models

Technology empowered innovations in insurance has pioneered new business models that offer clarity, stability, and predictability and scalabilty.

Innovative Technologies

The advancement of technologies like AI/ML, predictive analytics, RPA, blockchain, and distributed ledger technology are leading to an upswing in the investment in Insurtech firms.

Low-Cost High-Value Alternative

The combination of instant value proposition, freedom from staff, and minimal financial liability make insurance tech a low-cost, high-value option.

On-demand services

Allows customers to purchase insurance through a website or mobile app for short-term events and price them accordingly.

LEADING PLAYERS IN THE INSURTECH INDUSTRY

Amid the emergence of insurtech, traditional insurance firms continue to be the frontrunners due to regulations and the capital required for an insurance license.
However, these companies are often profiting by teaming up with InsurTech start-ups, as this lets them address the contemporary business models such as microinsurance and on-demand insurance.

Among the first to embrace technology in the insurance space was Berlin-based Friendsurance, who ideated the concept of the first peer-to-peer (P2P) insurance community. It was inspired by a small group of individuals who wished to lend support to each other in the event of a loss.

Friendsurance established the P2P insurance model to incorporate smaller groups into a bigger insurance pool and offer claim-free yeas with a cash-back bonus. Other early adopters of insurtech include Trov, an on-demand property insurer, and CoverHound, a price-comparison aggregator.

The prominent players of Global InsurTech market are Quantemplate Limited, Slice, Neos, Shift Technology, Lemonade, Trov, Oscar Health, Acko General Insurance, ZhongAn, Majesco, to name a few. These players are also collaborating with other market leaders to expand their offerings and acquire new customers.

 INSURANCE TYPES 

The insurance type market segment of the InsurTech industry has been divided into Commercial insurance, Property and Casualty insurance, Health insurance, Life insurance, and others.

Insurtechs are revolutionizing business continuity in all major insurance products and business lines, with concentrations in the Property & Casualty (P&C) insurance sector.

Keyplayers

Key applications of Insurtech

 CUSTOMER IDENTITY VERIFICATION

CLAIMS MANAGEMENT

PAYMENT PROCESSING

SMART CONTRACTS

 

FRAUD DETECTION

P&C INSURANCE

The market demand for property and casualty insurance is expected to increase during the forecast period.

These technologies are paving new possibilities for customer acquisition, service provision, greater opportunities for data collection, fraud detection and risk management and overall regulatory compliance and control.

There are a ton of latest trends and digital disruptions that are emerging in P&C Insurance. The three main InsurTech trends that P&C insurers can leverage to build business resiliency and appeal to the new age customer are :

  • Data analytics : While insurers have implemented advanced analytics in areas such as claim triage and fraud identification. Artificial Intelligence-driven analytics are helping insurers to process claims in seconds. More importantly, P&C insurers can track their own data to see how well certain policies are selling and which receive the greatest number of claims, ensuring they are in a prime position.
  • An omnichannel customer experience: More consumers are now eager to use digital platforms to engage with their providers to check on routine items such as the status of claims. By giving customers the freedom of self-service, insurers can provide more personalized interactions in real-time. Insurers are now looking to innovate their typical customer service offerings to appeal to the new-age customer, by an omnichannel experience for an accurate interaction. Conversational AI Chatbots will dramatically change how they interact with their insurance providers.
  • Insuring and managing risk: The fast-moving risk landscape is creating many new, extreme threats that most P&C insurers are not prepared for — most notably related to the pandemic, cybercrime, and natural disasters. Unfamiliar insurance gaps are giving P&C insurers with rare opportunity to innovate, analyze and manage new risks effectively in line with environmental, social, and governance (ESG) factors. The increasing accuracy and sophistication of AI and telematics, capable of capturing insights in real-time, will prove critical for insurers to safeguard customers as crises unfold.
P&CInsurance

duckcreek

 Duck Creek Technologies is a software-as-a-service (SaaS) company that provides its core systems solutions to some of the largest property and casualty (P&C) and general insurance companies in the country.

Duckcreek

It is primarily a P&C Insurance platform that exists to manage most of the day-to-day operations for Insurance Carriers and help develop industry-specific software that helps these carriers to deploy and manage their products and services. The list of insurance companies duckcreek provides solutions to includes Progressive, Liberty Mutual, AIG, The Hartford, Berkshire Hathaway Specialty Insurance, and GEICO, among many others.

 The Key takeaways of this platform is that it focuses on the cloud which represents its primary business model.

Also, while huge losses could be hitting the insurance carriers where insurers must pay out on certain claims as a result of the pandemic, and with many insurance stocks going down considerably too, DuckCreek will not be directly affected by any incurred losses since it’s not an insurance carrier.

 Catering exclusively to the P&C insurance industry, it offers core software products like policy management system, claims, and billing administration systems. 

The system that DuckCreek sells is a “single, unified suite of insurance software products” which is a complete end-to-end insurance offering comprising of industry-leading solutions to its business clients. The suite includes products that allow companies to create new insurance products and manage those products from quoting, binding, and servicing, full-featured policy, rating, billing, and claims solutions that are critical to P&C insurers. The suite can also assist with important billing and payment activities and helps carriers throughout the claim’s lifecycle, among other services.

DuckCreek can sell these capabilities as a full suite or individually through a subscription model which can be implemented in a traditional on-premises deployment or via Duck Creek OnDemand (SaaS), wherein DuckCreek will manage all the system management and maintenance. By accessing DuckCreek OnDemand, the company’s enterprise Software-as-a-Service solution, insurance carriers can navigate uncertainty and capture market opportunities quicker than their competitors.

HOW STARTUPS ARE ADVANCING IN THE INSURTECH AREA

New, technology savvy players are entering into the insurance sector, bringing out the force of their innovative, disruptive, opportunity-laden power. They will alter the terrain on which incumbents compete, bringing the necessary changes.
Today, legacy insurers have begun to pay much more attention to newcomers. They have turned as some of the largest funders of these startups, recognizing that partnering with technology firms can be a game-changer.
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Inurtech for startup

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