How Will Insurtech Be Able To Change The Status Of The Insurance Industry?
Insurtech is the combination of the words “insurance” and “technology”. It also refers to the digital revolution and technology innovations shaking up the insurance industry. This revolution has speeded up since 2016. It is still at its early stage. “Innovation” and “disruption” are by-words used to describe the innovations happening at break-neck speed.
It was found out that 3 in 4 insurance companies believe that some part of their business is at risk of disruption within the next five years.
Insurtech was brought about by innovations in technology, such as gadgets, Internet speed, and software. Gadgets that work in insurtech include GPS trackers, trackers worn on our wrist or other wearables, cell phones and tablets. In most cases, fusions of several technologies are involved. Indeed, an Internet of Things. It has been estimated that about 500 million smartphone users will be using a mobile medical app in the future. It is projected to grow to 1.7 billion smartphone and tablet users in the coming years. It has also been predicted that the worldwide Insurtech market will grow at a compound annual growth rate of over 10 percent between 2019 and in the upcoming years.
The insurance industry is such a traditional industry that embracing technology expectedly should take more time. The rise of Insurtech is highly correlated with the rise of financial technology or fintech in the banking industry. Indeed, Insurtech has been described as a subset of fintech. To say the least, these are game-changers. Already, after fintech and Insurtech, we are seeing the birth and growth of health tech.
There are many facets to insurance. Every aspect of the industry is now being reformed by technology. Insurtech is multifaceted. We now have highly customized policies, personalized insurance solutions. The one-size-fits-all solution is being squeezed out. With Insurtech, buying an insurance policy can be done from the comfort of your home, your office and through your smartphone in less than 15 minutes. Today, sales of insurance are highly dependent on the call center. At least 78 percent of client contact is through the phone. But change is imminent with the rise of Web-based platform and mobile applications by which insurers can interact with customers.
Data from Internet-based devices
Insurance products and services will become more customer-centric, giving customers power like never before. On the other hand, for the insurers, big data and predicting risks will be digitally based. Indeed, many aspects of the insurance business are being remodeled. Start-ups are reinventing the way people buy insurance, how insurers manage risks and other solutions to a host of disruptions.
Examples of Insurtech
Data about a driver can be automatically linked to his car insurance. Instead of computing premiums, data on the driver is immediately made available to the insurer. In case of a car accident, emergency services can be made available and insurance claim can be made on the spot using an app. This can be made possible through software.
Concerning health insurance, biometric information is linked to the insurance policy. This can be done, for example, through the use of Apple Watch.
On-demand insurance for specific events can be made available, such as car insurance while borrowing a friends’ car. This can be made possible through the use of telematics insurance or technology where a gadget called a telematics box is placed in the vehicle that measures various aspects of how one drives. Insurance premiums are, therefore, based on the current driving behavior of the driver rather than on historical performance. The premiums are, therefore, personalized. The technology in the telematics box uses a GPS, a motion sensor, a SIM card — to compile the data and the software.