The World Economic Forum describes this period of disruptive technology as the fourth industrial revolution. Almost every industry is feeling the impact of technology on customer expectations and business models. The insurance market is no exception.
Compared with other industries, the rate of change across the insurance spectrum has been relatively slow. Insurance has been shielded by inherent complexities, regulations and even business success. Why change if all is well? However, change is already underway – and being agile will ultimately determine a business’ future.
Is insurtech enabling or disrupting the insurance value chain? There is a good reason to believe that insurance is indeed heading down the path of disruptive innovation.
What can Insurers learn from the rise of Insurtechs?
In the past few years, insurtechs have challenged the norm and gained varying levels of success across the entire insurance landscape. Technology is making insurance more affordable, accessible and customizable than ever – reducing barriers to access and delivering value to the client.
With their innovative technology, insurtechs are changing the very lexicon of legacy insurance with trendy terms like ‘radically better’, ‘a new kind of insurance’, ‘fast, easy & friendly’ and ‘available to the masses’. With a focus on usage-based platforms, insurtechs are customizable for individual needs, even the most esoteric. For insurtechs, it’s all about enhancing the experience – giving customers what they want, when they want it.
Let’s take a look at some of their unique offerings:
- Redefining what insurance means – from mandatory, enforced purchases (customer “has to” buy insurance), to offering optional, innovative, value added services (customer “wants to”) – such as Laka, the collective coverage insurer designed exclusively for the bicycling community
- Serving customers’ individual needs with agility and flexibility – such as usage based, pay-per-mile motor insurer By Miles
- Re-establishing genuine trust with the end consumer – such as pet insurer Bought by Many, which promises to be there for clients when they need us the most. “We care as much about insurance as you care about your pet”
- Offering a data rich experience – such as Cytora that augments, filters and prioritises submissions, and aims to help insurers underwrite more accurately and achieve productivity-led growth
- Making business frictionless – such as the event-based insurance model offered by parametric insurer FloodFlash. Their advanced flood detection technology makes settlements based on a pre-defined trigger rather than through the traditional assessment of the cost of damages
- Making it mobile, any time, any place, anywhere – such as commercial drone insurer Flock, which provides commercial UAV cover by the hour, day or month, for individual operators and the world’s largest fleets. “Flock provides fully flexible drone insurance to help you fly safer and smarter. Simple, scalable and easy to get started”
- Offering a very clever, user-friendly service – such as 100% digital motor app, Cuvva (Want to borrow your friend’s car for a few hours?) that promises “radically better insurance that ditches the middlemen and the outdated systems, making it fast, easy and friendly.”
These features illustrate how insurtechs leverage digital technology to target distribution and products, rather than business efficiency, claims management or data and analytics.
In the increasingly uncertain future of insurance, being a digital leader is essential. Learning from insurtechs can enrich your strategies and boost your fast-mover advantage – allowing you to turn these challenges into great opportunities to grow your business and flourish.