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