Insurtechs initially sprang into existence in response to the complacency of legacy insurers. That was the assessment of McKinsey as far back as 2017, who described the rise of the Insurtech movement in terms of “innovative, disruptive, opportunity-laden power” capable of altering “the terrain on which incumbents compete.”
By the same token, it’s vital that Insurtechs themselves don’t fall into the trap of complacency themselves. No matter how confident they may be in their technology’s ability to drive efficiency, there’s always a new frontier to push for – and fresh trends to explore.
Big data made bigger by the Internet of Things (IoT)
Insurance is a fundamentally data-driven industry, and Insurtechs need to make sure that they’re making every effort to use that data effectively.
IoT telematics, for example, have reached heights of variety and sophistication that aren’t limited to the humble automotive black box.
Life and health insurers need to ensure they’re taking full advantage of the data provided by wearables, while property insurers can now access a wealth of sensor-based data which, in turn, adds valuable new ways to mitigate losses for certain kinds of damage.
Automotive telematics haven’t been stagnating, either, with newer tech promising to calculate lower risk driving routes and impact policies accordingly.
Reducing administrative burdens
The ways Insurtechs use data shouldn’t be limited to flashy telematic technology. The less outwardly exciting (but no less massively useful) realm of petty admin has equally valid applications for the latest tech.
Embracing the likes of intelligent document processing, for example, allows Insurtechs to reduce customers’ time endlessly adding simple data like their date of birth to insurance paperwork: a task for which forward-thinking Insurtechs can easily take the reins through website scraping and searching public domain sources. This is beneficial for every party involved. A 2017 study titled “The Future of Commercial Broking” found that up to 63% of a broker’s day can be spent on admin – but leveraging the right tech can substantially reduce this figure.
By cutting down on the tedium, brokers aren’t just saving themselves time – they’re returning humans to high value tasks, ensuring brokers’ valuable advisory skills are being directed towards the more important avenue of a strong customer experience.
Discovering actuarial efficiencies through automation
Automation is another huge area for Insurtechs to exploit. Fundamentally, Insurtechs exist to discover efficiencies that incumbents can’t (or won’t) consider, and automation speaks to the heart of that goal.
You need only glance at organisations like Hollard Group, which reduced projected actuarial time by approximately two months per year, to recognise the value of software enabling automation. And there’s no limit to its uses, from the always-on convenience of customer-facing digital assistants to back-end calculations drawn from AI analytics.
Embedding and integrating
According to a recent report from EY, Insurtechs are increasingly interested in API-led integrations with the likes of banks, vehicle manufacturers, and other entities who benefit from embedding insurance solutions seamlessly into the fabric of their customers’ journeys.
It goes without saying that this avenue represents a valuable means of achieving growth for Insurtechs looking to catch up to their monolithic incumbent competitors.
Combining technology and transparency
Insurtechs don’t just offer solutions that improve customer experiences – whether through frictionless paperwork, embedded products, accurate policies informed by telematics data, and so on – but also the opportunity to gain customers’ trust. Deloitte’s 2022 Insurance Industry Outlook points out that greater transparency is vital for the sector – and Insurtechs are in a great position to supply it. Platforms like hubb’s, which offer full visibility of our back office, can simultaneously offer a more convenient experience and inject a portion of much-needed trust into the process by which insurers and brokers operate.