March 4, 2019
Emerging trends in InsurTech
In this series of articles CoreValue is going to explore the growing impact of technology on the insurance sector. We have spoken to a number of experts from financial, tech and insurance sectors to discover what is standing behind the hype of InsurTech.
It’s a time of inordinate change in the insurance industry. Insurance companies are facing the challenges of the increasing demand for better customer centricity and customer experience. The advancement of technology offers the industry the very real chance to attune the insurer’s business plans to the market trends in order to produce customer-driven outcomes and to respond to regulatory demands. New technology-led providers, “InsurTechs,” have entered the insurance sector covering the digital needs of the customers and end-users. Strategic investment in InsurTech makes it possible for traditional insurance businesses to be innovative in their approaches and operations so as to take advantage of the digital transformation by:
- Offering a superior customer experience by providing all-inclusive services which harness the latest technological advancements.
- Revamping the operating model, with the active involvement of technology, in order to enter new market segments and achieve higher profitability.
Darius Kumana, Co-Founder & CPO at Wrisk, a UK-based InsurTech that offers contents insurance, says, “There are so many opportunities to leverage technology to unlock the competitive advantage and find efficiencies or change the customer experience within insurance. The entire value chain is ripe for change: frictionless disclosure, instant MTAs, subscription-based rather than annual policies, automating claims, the list goes on. Finding better ways to assess and communicate personal risk touches on a whole host of technologies from novel data-sources and sensor data through aspects of machine learning and AI. Making this complex risk landscape easy to navigate and understand by customers is no mean feat.” Wrisk is on a mission to change the way people think about and buy insurance. Wrisk sees the need for insurance to be connected to our lives, devices and to treat us as individuals.
There are some key trends that we have identified that we see that are shaping the industry and enabling traditional Insurers to stay competitive and capitalize on their investment in technology.
In this first blog post we will discuss tech trends including big data, AI, IoT, and Blockchain and their impact on hyper-personalization.
Data Empowerment. Big Data and Analytics
An omnipresent Data is the business differentiator for the insurance industry. With its exponential growth, the leveraging of structured and/or unstructured data and access to on demand data by the insurer to make sustainable use of the data is a matter of business existence. The technology is now right here allowing insurers to focus on outcomes. That is, to process the accumulated data in order for insurers to find new customer segments, to drive timely insights into customer needs, to innovate products that would blend traditional products and preventative services together, for quick claims processing, to product development, and to enable targeted marketing; all are assets for becoming competitive.
In a hyper-personalized world where customer experience matters the most, emerging technologies offer options to improve customer service such as the application of blockchain for identity and transparency, mobile payments that remove barriers of adoption, AI for intelligent use of data that has been collated, wearables and sensors as a new mechanism of collecting data, all of which assist in understanding the customer at a new level in detail. Equipped with a comprehensive portfolio of customer information, insurance providers can manage fact-based risks and create targeted services and products specifically fitting their customer’s needs.
As a real-life example, CoreValue built a solution for an InsurTech customer in order to gain data-driven marketing insights utilizing machine learning algorithms. Now, sales and marketing teams can engage with potential clients on a new level, realize a personal approach to the fullest, and run targeted marketing campaigns while simultaneously reducing marketing expenses by applying machine learning algorithms. Sales reps and marketers approach the potential and existing clients with will-fitting actual messaging, based on getting super accurate marketing insights into the users’ behavior by attaining advanced Customer Segmentation and Loss Ratio that identifies a “Perfect customer”.
In the next InsurTech blog series post we will discuss how InsurTechs can revamp legacy systems and utilize the potential of data that uses new technology as a part of a connected data strategy and improved cybersecurity.