Here’s What You Need To Know About Insurtech
Over the past few years, we’ve finally been seeing the industry open up to new possibilities, fuelled by the tech sector.
14:10 03 August 2020
Historically, the insurance industry has been slow to adopt new changes. Unlike industries like finance and health, the insurance industry has stuck to the “tried and true” antiquated methods of the past, resisting the technological wave that disrupted many other industries.
Insurtech is the use of technological innovations combined with the traditional industry model. It’s old-school insurance with streamlined efficiency.
Through insurtech, insurers can collect and analyze data with less ambiguity in the process. This is possible because your everyday devices like mobile phones, GPS, wearable gadgets, and others provide these companies with all the data they need. Innovative insurtech companies use artificial intelligence to ensure customers pay only what they should.
Why disrupt the insurance sector?
The insurtech revolution is anchored by service and emerging technology. Companies on the frontier of the revolution can provideyou with insurance coverage that matches your individual circumstances—often using only your mobile device.
The days of countless forms to find a specific policy are over. But there’s more to the revolution—it gives the underdogs (small businesses and startups) a fighting chance in a sector dominated by big companies. Many traditional insurance companies are rigid in their offerings, and don’t cater much to smaller, individualized policies. This opens a window of opportunity for insurtech companies to cater to customers in need of those services.
Advantages of Insurtech
Why should you opt for an insurance plan offered by an insurtech company? For starters, there’s a higher chance of fairer pricing. Using disruptive technology like artificial intelligence, insurtech companies can offer customers reasonable pricing. Also, these businesses have fewer overhead costs, minimizing costs that would traditionally be offloaded to their consumers.
Unlike many traditional insurers, insurtech companies cater to different scenarios. You’re more likely to find customized insurance services to match your preferences with these innovative companies. Furthermore, by digitizing the entire insurance coverage process, insurtech companies make it possible to select the best possible plan with minimal work and less interference from agents and middlemen.
Although there are plenty of benefits of insurtech companies, it’s not without its challenges. One of the biggest reasons traditional insurance companies hesitate to adapt technological changes is because of the inherent regulations involved in their services. To circumvent this, some companies are looking to partner with third party operators. This can create a Catch-22 situation, because unfortunately, most insurers aren’t interested in collaborating with these innovative startups—even when it can help ensure their long-term survival.
Furthermore, the technology that drives insurtech is heavily reliant on data. Today, big data is all the rage. With the growing concerns of how consumer data is used, some policyholders are concerned about what they’re expected to give in exchange for convenience and efficiency.
A handful of companies continue to challenge the status quo in the insurance sector. Most of these outfits are startups that are still struggling to find their feet in the industry. Olive is one such example. The company strives to shift the way drivers see extended warranty options by offering instant coverage, easy online sign-ups, and payment freedom with flexible terms.
Like similar insurtech company models, it eliminates the middleman and markups to create a frictional experience that extends beyond basic insurance. It also gives vehicle owners the ability to search for warranty options that cater specifically to their car; for example, if you owned a Camry, you might want to explore olive’s Toyota extended warranty options.
Other insurtech companies use technology to assess damage, reduce wait times for claims, connect insurance vendors with the right services, and provide freelancers and independent contractors with the coverage they need.
With so much to offer, insurtech is bound to change the way the insurance industry operates. With more categories included and a personalized approach to insurance, a revolution is on the horizon, and old-school regulations are a thing of the past.