Disruption in the insurance industry is seen more than in others and while for some this is an opportunity, for others it is a difficulty and threat.
Quite interesting times are ahead of insurers as new challenges are shaking the market. Insurers are faced with their outdated technology and demanding legal restrictions which require significant adaptions to be done and new business models to be developed.
Statistics show that at least 86% of insurers think their revenues are at risk from the rising technological developments – and this is best visible with the upsurge of insurtechs. The fact is that some of the traditional insurers on the market are more than 300 years old, while, on the other side, quite a few insurtechs are only 300 days old. And they are shaking the financial sector. Investments made in the insurtechs show exactly that – according to FinTech Global they have doubled between 2017 and 2018.
What is an insurtech?
Insurtech stands for insurance technology which is designed to enhance the operational efficiency and efficacy of insurance companies. One might say that the technology in the insurance industry is nothing new, and this is the case, but insurtechs bring something more.
They bring innovation in various forms of artificial intelligence, internet of things, smartphone applications, drones etc. For example, using artificial intelligence in apps had a quite significant contribution to the fast success of the insurtechs as the number of data they can produce are exactly what is needed to enhance efficiency and effectiveness.
Most prominent insurers are already active in providing customers with a mobile app to manage their insurance business. This has major benefits on both sides: saving of administrative costs for the insurer and improving customer experience with the service that is simple, fast and convenient.
“Insurance CIOs need to expand their market insight concerning the innovation and disruption potential of insurtechs. Start by identifying the areas where insurtechs could add value; then evaluate potential collaboration or investment opportunities” – Juergen Weiss, managing vice president at Gartner.
What is there for insurers to do to still remain competitive:
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