21 August 2019 | David Warren
What Is Disrupting the Insurance Industry?
Insurtech, digitalization, innovation... These are frequently used buzzwords by carriers, vendors, and consultants over the past few years.
The industry is certainly trying to innovate. For instance, AM Best recently announced it will be attaching an “Innovation Score” to its coming ratings. In addition, Prudential’s acquisition of Assurance this week for $2.5bn shows that investments continue to be made.
Is the hype deserved? Will the new replace the old? Or, will the legacy structural issues of insurance prevent real change?
DataArt, an independent global technology consulting and services company, decided to take an in-depth look at this subject and will be sharing its findings in a series of short articles.
In undertaking the research, DataArt consulted a number of movers and shakers, including insurance industry leaders, cutting-edge technology vendors, and its own subject matter experts. The first article investigates Insurtech.
Trend Number One: the Explosion of Insurtech
The term “Insurtech” has been around for over five years. There are currently over 1,000 Insurtech companies currently in business. As the market has evolved, the term has grown to encompass a broad range of constituents, including technology vendors, new distribution models, and new coverage models. The diagram below highlights a number of these.
The Insurtech world will come together for “Insuretech Connect 2019,” an event held annually in Las Vegas that attracts over 7,000 participants.
DataArt has spoken to a number of the presenters at the show. Below, we explore what they are saying.
InsuredMine is an advocate for a customer-first philosophy. The company facilitates the communication process between insurance agencies and their insured clients.
This platform integrates with a client's social media feed to spot potential insurance risks, enables chatbots, and delivers real-time data to a dashboard.
Raution Jaiswal, a co-founder at InsuredMine, expects insurance companies to undergo a digital transformation in the very near future.
Raution Jaiswal, a co-founder at InsuredMine
“Although the insurance industry is far behind other domains in terms of digitalization, customer expectations will force insurers to transform faster," comments Mr. Jaiswal.
EagleView streamlines the process of property claim consideration by taking eagle-eye shots and applying machine-learning techniques to them.
WeatherCheck alleviates the process of detecting hail damage. The platform investigates weather events at certain locations and allows for claims to be filed from locations that have had a high level of estimated hail.
Buzzvault is making the insurance purchase process more user-friendly through in-app personalization. Buzzvault allows a user to create a vault of items to be digitally insured.
Avibra, a loyalty program app using AI and ML, provides a platform that allows life insurance carriers to improve their loyalty programs by rewarding clients who exhibit good habits.
Yogesh Shetty, Chief Executive Officer at Avibra
“I believe the future of loyalty will be based on bundling more services. This will have a direct impact on the personal financial, physical and career well-being,” says Mr. Shetty, a speaker at Insuretech Connect, regarding loyalty changes within the insurance domain.
Optimity provides a further option for insurance companies to increase customer loyalty and engagement.
Optimity offers a custom sandbox for life insurance companies, with user-centric engagement for their policyholders. Although it’s primarily mobile-first, the app also works through browsers and wearables. It delivers real-time data and leverages ML to offer personalized recommendations and predict risks.
Jane Wang, Chief Executive Officer at Optimity
"We work in partnership with our carrier client to maximize retention for policyholders and focus on consumer happiness and perceived value during year 2-5.Nowadays, consumer expectations for Life and Health insurance engagement and loyalty programs cover mainly value-added experience. It includes services that lead to feelings of being taken care of and access to perks and monetary rewards for keeping well,” says Mrs. Wang.
DataArt is excited about the rate of innovation that Insurtech companies are bringing to the Insurance market.
However, while billions of dollars are being invested in Insurtech companies, age-old structural legacy issues such as differing cultures, vendor and procurement apathy, and misaligned carrier incentive plans may dent this astronomical growth in the coming years.
On the other hand, last week's acquisition of Assurance by Prudential for $2.5bn proves that the prize is there to be won. Whether Assurance is the exception to the rule, we will only see in time.
Stay tuned for the next chapter in the series.