The insurance sector has remained the same for years. Thanks to technological advances, innovations and a fresh take on insurance, conventional business models are finally being replaced.
Insurance Technology or Insurtech has played a significant role in driving this change. Numerous insurance giants and startups are starting to see this change as a way to step up their game when it comes to product offerings and impressive client benefits.
Established insurance entities are investing profoundly in insurtech trends in order to cope with lean startups. Also, these trends cut management costs, enabling new insurtech companies to take on pricing.
What Is Insurtech?
Fintech developments like digital payments have been making headlines and the insurance world has seen a growing trend in Insurtech. But what exactly is Insurtech? It is the technology behind the formation, allocation, and regulation of insurance business.
It includes things like smartphone apps, automated processing, online policy handling, claims processing tools, and consumer wearables. These technologies help insurers collect and analyze customer data so that they can target the right audience at the right price, encourage them to behave in a less risky way, and cut the cost of claims.
Currently, Big data, IoT (Internet of Things), and AI (Artificial Intelligence) are the primary focus of Insurtech and the majority of the invested capital is being used in these areas.
In recent years, insurance providers have taken up a fresh approach to meet their business objectives. This meant opting for a more customer-focused approach rather than solely focusing on selling the product that offers no gratification.
Before Insurtech came into play, the Internet was already a key player in numerous domains. Everyone had a site and every insurance provider offered a product that was quite complex in nature. To the average man, insurance meant three things – car/bike insurance sold by dealers, health insurance plans for the family, and life insurance.
Insurtech has helped insurers in simplifying a product that was more than just a mandatory aspect of car insurance or life insurance.
Its Impact on Average Consumers
Thanks to Insurtechs, customers no longer have to settle for expensive insurance that doesn’t even match their needs. Consumers can now demand products that actually benefit them.
Today’s customers are busy. They don’t have the time to focus on a detailed and multi-layered description of a product. Plus, the competition is getting more aggressive every day and the only way to satisfy the targeted audience is to make it stand out.
In this software updates era, insurers must present their customers with up-to-date processes rather than some boring conventional models. Fortunately, Insurtech can help with this problem. It can offer a spot-on solution to upgrade processes and products.
Customers want their insurers to offer custom products. However, customization doesn’t only mean delivering emails that address the consumer by his/her name. Insurtech has made it possible to create deep level customization.
This includes creating completely personalized communications, well-equipped relationship managers, customized products, and more. This, in turn, helps in providing an excellent customer experience, which is beneficial for sales.
Artificial Intelligence technology can be utilized to offer a personalized service for customers. It can summarize quickly and offer the most useful and relevant products much quicker than humans.
Organizations that have shifted their focus on Insurtech are in sync with the existing trends. Now consumers are looking for simplicity, quality, affordability, process transparency, and most eminently speed.
Domains such as insurance are prejudiced for being expensive, complex, and even unjust. This is again justified as previous business models weren’t customer-centric. However, Insurtech is changing this fact.
The Bottom Line
Even though the UK decided to leave the EU, according to Accenture, the capital invested in Insurtech has increased considerably in recent years. Once the confidence of the market recovers, by 2021 Insurtech is expected to reach £253billion.
The competition is tough, options are numerous, and there are several sites that offer this product. Ultimately, the decision to purchase the product from a particular seller depends on the consumer. The same applies to insurance.
Consumers should be presented with a strong reason to pick one insurer over others. Also, remember that high-quality services, processes, and pricing helps in proving a great customer experience.