Where can InsurTech go next?
1. Partnership Evolution:
Partnerships between insurtechs and incumbents will inevitably become more abundant across many areas of the value chain, and those that are in the early stages will start to mature. The insurtech ecosystem is somewhat unique, in that the majority of insurtech organisations are looking to partner with insurers, while many of these incumbents don’t want to do everything internally and are now looking to find insurtechs to work with that can solve some of their pain points. These partnerships will also likely lead to more innovative ways to distribute insurance, including non-traditional avenues
2. The continued rise of AI and machine learning:
Artificial intelligence (AI) is likely to become the leading piece of technology used by insurtechs and continues to be implemented or explored by insurers. AI and machine learning have the potential to impact every aspect of the way insurance businesses are run, making almost every process more efficient. AI will likely have a particular impact on underwriting and pricing, as well as helping to automate processes and enhance personalisation of insurance products.
3. Health insurance exploration:
Traditionally insurtechs have focused more on opportunities to impact general and life insurance, but we now expect them to start exploring how they can influence and impact the health insurance industry as well. Those that work within data, wearables and prevention in particular will look at the opportunities in health.
4. Ethical and legal issues:
The ethics discussion in insurance and insurtech will become more important and prevalent. In particular this will focus on the use of AI technology and how consumer data is used by the insurance industry. Insurers have access to an abundance of customer data and external data sources, and will need to navigate if and how they can ethically and legally use this information. Increasing privacy and consumer data regulation around the world will also be key to this discussion.
5. Prevention and mitigation:
There will be an increased focus on prevention and how this can become a value-add for insurance customers. Insurtechs such as FloodMapp are developing propositions in using predictive modelling to determine the risk of natural disasters and helping support the prevention of loss. This type of technology will be explored more commonly, particularly as the effects of climate change become more apparent. Other examples include the prevention of fraud through predictive modelling and data analytics and insurtechs focusing on prevention in the health insurance industry.
6. Payment tech developments:
Payments and data analysis tools will become more important. So far insurance innovation has focused more on the key value chain areas of claims, underwriting and distribution more broadly, but it will be interesting to see the area of payments in insurance take more focus. This will revolve around the opportunities of using tech to increase the efficiency and speed of payments to enhance customer experience in the event of a claim. Parametric measures will play a part in this process to understand and manage the triggers for efficient claims payouts.
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