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.
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.
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.