What Are the Trends of Insurtech?
As the Insurtech industry continues to evolve rapidly, it’s essential to stay informed about the latest trends shaping the sector. To help you stay ahead of the curve, we’ve gathered insights from 14 industry experts on the most significant trends happening in Insurtech today. From personalized insurance offerings to the adoption of AI and blockchain technology, these trends are revolutionizing the way insurance is delivered and experienced by customers.
- Personalized Insurance Offerings
- AI and ML Enhancing Efficiency and Precision
- Blockchain Adoption Decentralizing the Industry
- Innovative Solutions Emerging from Big Data
- Blockchain Stabilizing Fraud Prevention
- AI and ML Improving Customer Experience
- AI-Powered Underwriting and Claims Processing
- IoT Devices Enable Premium Adjustments
- Heightened Customization and Personalization in Insurance Products
- Drone Technology Revolutionizes Risk Assessment
- Maintaining Customer Trust With Additional Contact Points
- Data Analytics Transforming Insurtech
- Experts Designing Software via User-Friendly Platforms
- Digital Distribution Channels Reaching a Broader Audience
Personalized Insurance Offerings
A growing trend within Insurtech is the development of personalized insurance offerings. By utilizing AI and advanced analytics to analyze customer data, Insurtech companies can provide tailored insurance products based on individual needs and risk profiles. This approach not only offers customers more customized insurance options but also enables insurers to manage risk more effectively and reduce their exposure to claims.
Moreover, personalized insurance offerings are attracting younger, tech-savvy customers who prefer a more adaptive approach to insurance. As this trend continues to expand, it is likely that more innovative and customized insurance products will be introduced by Insurtech startups.
Anirban Saha, Founder, TechBullish
AI and ML Enhancing Efficiency and Precision
A trend occurring in Insurtech is the growing utilization of artificial intelligence (AI) and machine learning (ML) to enhance the efficiency and precision of insurance processes. Companies in this sector are taking advantage of AI and ML to automate various tasks, including underwriting, claims processing, and fraud detection.
For instance, AI and ML algorithms can analyze extensive volumes of data to identify patterns and predict risk with greater accuracy than humans. This capability can assist insurers in making better-informed decisions regarding pricing policies and risk assessment.
AI and ML are also being employed in Insurtech to streamline the claims process. Automating claims processing with AI enables insurers to reduce the time required to settle claims and enhance the customer experience. Some companies, for example, are utilizing AI-powered chatbots and virtual assistants to help customers file claims and obtain information about their policies.
Jason Moss, President and Co-founder, Moss Technologies
Blockchain Adoption Decentralizing the Industry
A significant trend transforming the insurance industry is the adoption of blockchain technology. This technology offers a decentralized and secure way to store and share data, making it an ideal solution for the insurance industry. A report by Allied Market Research indicates that the global blockchain in insurance market size is expected to reach $1.39 billion by 2026, growing at a CAGR of 65.5% from 2019 to 2026.
Insurtech companies are utilizing blockchain to streamline processes such as claims processing, fraud detection, and underwriting. Swiss Re, for instance, partnered with B3i, a blockchain consortium of insurers, to develop a distributed ledger platform for sharing data and settling claims. The platform allows for real-time tracking of claims, reducing the need for intermediaries and minimizing the risk of fraud.
Himanshu Sharma, CEO and Founder, Academy of Digital Marketing
Innovative Solutions Emerging from Big Data
Emerging technologies such as artificial intelligence, big data, and predictive analytics are transforming the insurance industry. Additionally, there is increased collaboration and partnerships between insurers and Insurtech startups, leading to the creation of new innovative products and services. New customer segments are emerging, highlighting the importance of higher distribution penetration and reach.
Blockchain technology is being utilized to create more secure and efficient insurance processes. Furthermore, underwriting and other traditional insurance processes are undergoing transformation through the use of technology.
These trends are just a few examples of the ongoing changes in the Insurtech industry. As technology continues to evolve, even more innovative solutions can be expected to emerge.
Brenton Thomas, CEO, Twibi
Blockchain Stabilizing Fraud Prevention
Blockchain technology is becoming increasingly prominent in Insurtech, with the potential to revolutionize the insurance industry. It can simplify claims management, reduce fraud, and provide real-time data to customers.
The fraud prevention benefits are particularly promising, as immutability, transparency, distributed ledgers, and smart contracts are four features that offer additional security. However, there are legal considerations that need to be addressed. Since blockchain is still a relatively new technology, there is limited case law on its use, leading to uncertainty about how courts will interpret and apply blockchain-based contracts and transactions.
Despite its potential, a lack of trust in blockchain among those who are unfamiliar with the technology means that widespread adoption may still take some time.
Martin Gasparian, Attorney and Owner, Maison Law
AI and ML Improving Customer Experience
A trend occurring in Insurtech involves the utilization of artificial intelligence and machine learning to enhance operational efficiency and customer experience within the insurance industry. AI and ML can automate various processes, such as underwriting, claims processing, fraud detection, and risk assessment.
Insurers can employ AI-powered chatbots and virtual assistants to deliver personalized customer service and address routine inquiries and claims in a quick and efficient manner. This can result in faster response times, decreased customer wait times, and heightened customer satisfaction.
Moreover, AI and ML can assist insurers in making more accurate, data-driven decisions by analyzing vast amounts of data from diverse sources, such as social media, weather data, and customer behavior. This analysis can help insurers identify emerging risks and trends, enhance risk assessment, and create more targeted and customized insurance products.
Trey Ferro, CEO, Spot Pet Insurance
AI-Powered Underwriting and Claims Processing
A growing trend in the Insurtech industry is the use of AI-powered underwriting and claims processing. By utilizing machine learning algorithms, insurance companies can analyze massive data sets to make more accurate risk assessments and detect potentially fraudulent claims. This technology not only helps reduce operational costs and increase efficiency but also boosts customer satisfaction. Additionally, it enables the provision of personalized policies and offers to customers based on their unique data patterns and behavior.
The implementation of AI-powered underwriting and claims processing is revolutionizing the way insurers handle claims. Chatbots and virtual assistants can be employed to assist claimants in filing their claims in a hassle-free and timely manner. Furthermore, this technology has enabled the automation of various aspects of claim-processing workflows, resulting in reduced errors and accelerated response times.
Tarun Saha, Co-founder and CEO, StallionZo
IoT Devices Enable Premium Adjustments
IoT devices have the potential to aid insurers in gathering data on policyholders’ behavior, allowing for premium adjustments based on risk. For instance, a policyholder might use a smart home sensor to demonstrate the presence of a fire alarm, which could make them eligible for a reduced home insurance premium. In a similar vein, a wearable device could be used to indicate regular exercise, potentially leading to a lower health insurance premium.
Leonidas Sfyris, CTO, Need A Fixer
Heightened Customization and Personalization in Insurance Products
A significant trend in the Insurtech industry is the growing emphasis on personalization and customization of insurance products. Advanced technologies, such as artificial intelligence, machine learning, and big data analytics, are being utilized by insurers to gain deeper insights into customer behavior, preferences, and risk profiles. This allows them to tailor insurance policies to the specific needs of individual customers, offering more flexible coverage options and pricing.
As a result, customers can enjoy a more seamless and relevant insurance experience. At the same time, insurers can improve customer satisfaction, retention, and profitability. The demand for personalized insurance solutions continues to grow in the market, indicating that this trend is likely to persist.
Basana Saha, Founder, KidsCareIdeas
Drone Technology Revolutionizes Risk Assessment
Drone technology is a recent development in the insurance industry, offering the potential to revolutionize the sector by providing insurers with an unprecedented level of data and insights. This information can be used to better assess risk and customize policies.
For instance, drones can be utilized to capture real-time data and video footage of a property during an inspection, providing a more comprehensive view of the risk.
Insurers can also access data from hard-to-reach or dangerous locations, such as roofs or mines, to evaluate potential risks. Moreover, drones can monitor hazardous environments and track environmental conditions that may increase a policyholder’s property risk.
This technology can improve claims processing accuracy and speed. Insurers can use drones to accurately capture images of damaged properties, which is particularly helpful for large and complex claims like natural disasters or construction projects.
Pete Evering, Vice President of Operations, Utopia Management
Maintaining Customer Trust With Additional Contact Points
The rising use of technology and automation in the insurance sector is met with skepticism by many consumers. According to research by Accenture, only 12% of insurance customers trust an automated phone or web service when filing a claim, compared to 49% who trust a human advisor. Insurance businesses consider client trust to be a major barrier to current corporate growth.
A PwC survey reveals that 74% of insurance CEOs view a lack of consumer trust in the insurance sector as a threat to business growth. Furthermore, 70% of insurance CEOs say it is tougher to maintain client trust in a digital world. In order to maintain customer trust throughout their value chain, carriers must offer additional points of contact to customers. This is especially important as insurers increasingly use technology and collect more consumer data.
Tiffany Payne, Head of Content, PharmacyOnline.co.uk
Data Analytics Transforming Insurtech
A trend in Insurtech involves the increasing use of data analytics and artificial intelligence (AI) to enhance processes and customer experience within the insurance industry. Companies are leveraging big data and advanced algorithms to collect and analyze customer data, assess risk, detect fraud, and make more accurate underwriting decisions.
AI-powered chatbots and virtual assistants are being deployed to provide customers with personalized insurance advice and support. Additionally, machine learning algorithms are being used to automate claims processing and settlement. Overall, data analytics and AI are helping Insurtech companies improve their operational efficiency, reduce costs, and deliver better customer outcomes.
APIs are also important in insurance as they improve customer experience, enable data sharing, facilitate partnerships and collaborations, and enhance operational efficiency. Carriers are beginning to understand the significance of APIs in the industry.
Brad Cummins, Founder, Insurance Geek
Experts Designing Software via User-Friendly Platforms
Insurance experts can now design and build the software they need without an extensive IT team. Little to no coding knowledge is required to take advantage of these user-friendly platforms, allowing them to be designed by people who know the industry best. Insurance leaders know exactly what they want out of their software, but those needs can traditionally get lost in translation between insurance and software development teams.
Improved insurance platforms are emerging that are faster, cheaper, and more flexible to shift along with insurers’ needs.
Shawn Plummer, CEO, The Annuity Expert
Digital Distribution Channels Reaching a Broader Audience
A trend occurring in Insurtech is the rapid adoption of digital distribution channels. Companies in this sector are utilizing technology to revolutionize the distribution of insurance products and services to consumers. This encompasses online marketplaces, digital platforms, mobile apps, and other digital channels that provide convenient and seamless experiences for customers to compare, purchase, and manage insurance policies.
These digital distribution channels enable insurers to reach a broader audience, offer personalized products, and deliver superior customer experiences. This trend is fostering innovation and transforming the traditional insurance industry. By leveraging technology, distribution processes are streamlined, customer engagement is enhanced, and business growth is driven.
Ryan Flannagan, CEO and Founder, Nuanced Media
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