What Are The Biggest Changes That Will Happen To Insurtech In 2019?
We all know that in a few more weeks, we will already going to say goodbye to the current year, which is 2018. In this year, we saw a series of changes shaking up the insurance sector and the level of innovation and associated disruption looks set to continue into 2019. These include greater collaboration with big firms, blockchain, and AI.
Insurtechs are reshaping insurance across a number of areas, from minimizing cyber risks through artificial intelligence-based assessment to automating ways to find cover for freelancers. Other innovations include offering more choice to customers. An example of this is — Insurance as a Service, which enables people to insure items only when they are in use, reflects how policies are increasingly being tailored to the customer. Big insurance companies are starting to realize they need to take notice of the threat of insurtechs and either challenge them or work with them. To compete on the same level as the high-tech market newcomers, traditional insurance companies know they need to integrate modern technology into their legacy systems. While 2018 has seen several developments, 2019 look set to see further change in the sector. We take a look at three areas that will preoccupy the insurtech space.
According to Sam Friedman, who is the insurance research leader at the Deloitte Center for Financial Services, the optimal word for 2019 will be collaboration. This means that instead of competing with insurers, the majority of insurtechs will work with the big players as collaborators, helping to drive improvements to services like underwriting and claims. For big insurance companies, working with insurtechs helps to reduce the cost of developing new products and also to transfer some of the risks. Another benefit is that the speed of innovation is often faster, with insurtech not weighed down by the same levels of internal bureaucracy.
Rise of Blockchain
Blockchain, by decentralizing information, creates data that is more secure and near impossible to hack. This makes blockchain more attractive to insurance companies. However, the cost of upgrading core systems for blockchain compatibility represents a large obstacle. In addition, there’s currently a lack of standardization which books breaks on wider uptake of blockchain so far. However, several insurtechs are investing in the blockchain, seeing the potential and opportunity for removing inefficiency and cost from the insurance value chain. One example is Lemonade, which specializes in property and casualty insurance. The Lemonade model uses a fixed fee from monthly payments and it uses an algorithm to pay out claims as soon as possible when conditions in blockchain-based smart contracts are met.
Next is us here at Inmediate. you all know for sure that we make policies transparent and trustworthy by using Smart Contracts, which is powered by the Zilliqa blockchain solution. We continue to strive in providing the Insurance industry with that ecosystem where Smart Contract Insurance can be transacted at lightning speed, full clarity, and at much lower costs than ever imagined.
Artificial intelligence platforms are assisting with the insurance customer process. In terms of insurtech, AI is reshaping claims, distribution, underwriting, and pricing. Many of these make use of machine learning algorithms. An example is the insurtech Pixoneye, which is a data analytics software-as-a-service company. The insurtech offers computer-vision technology to analyze a customer’s public online photo galleries to create a personal risk profile.