Technology and technology-enabled products and services are dramatically altering everyday lives. Today’s always-connected customers expect a fast, seamless Amazon-like buying experience from all their purchases. These customers value convenience, streamlined processes, and products and services tailored to their individual needs. And insurance is no exception for these customers.
In recent times, the insurance sector has begun leveraging new technologies like artificial intelligence, data science, digital platforms, the Internet of Things, and more to cater to this smartphone-wielding, digitally-savvy customer base. These new technologies are shifting traditional ways of researching, purchasing, and doing business, and making way for a new player in insurance – insurtechs. Recent evidence confirms the growing importance of these insurance technology innovators. According to Global Digital Insurance Platform Market Report, the digital insurance platform market is projected to be worth up to $169.2 billion by 2026, growing at a CAGR of 9%.
Insurtechs are bringing innovation not just across all lines of insurance—car, life, property, travel, and health but also across the entire insurance value chain—product design, marketing, underwriting, claims management, and services. Using the Internet of Things and smart devices, they are making all information on coverage, liabilities, and premium easily accessible to the customer, thus simplifying the buying process. Using digital platforms, they are providing anytime, anywhere convenience to customers while weeding out inefficiencies in the claims processing and underwriting process. Using data science, they are making risk assessments more accurate and faster, thus leading to better service. Using drone technology, they are making inspections and surveys faster. Using connected devices, they are gathering massive real-time data that not only allow insurers to accurately predict potential losses but also forewarn customers of potential loss, thereby reducing the number of claims. Using payment solutions, they are making it easy for customers to make their payments. Using machine learning, they are making fraud evaluation and detection easier.
These are just a few examples of how new technologies are streamlining operations and services, providing a smoother customer experience and ability to customize products, and reducing time and costs. In doing so, they help create a strategic advantage for the insurer. Although adoption is still low in many emerging economies, it is picking up steadily. Insurtechs offer massive potential – convenience and customization for the end-customers, simplified, faster, and cost-effective processes.
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