How InsurTech startups supercharge insurance innovation
The forecasts are inexorable: a huge wave of change is coming to the insurance sector. Despite a long period of stagnation, new technologies are gradually transforming outdated traditions and principles.
InsurTech startups are quickly disrupting the insurance industry, which traditionally has been slow in adopting new technology trends. A mature industry and startup-driven innovation are destined to bring out the best in one another.
Let’s see how insurers are customizing their services to meet the evolving demands of the digital economy.
The insurance sector continues to evolve
For many years, insurance companies have been increasing their profits and customer base by diversifying services and expanding geographically. However, such an approach is no longer relevant.
With tighter regulations, fiercer competition and increased customer expectations, companies have to create a consistent message that will demonstrate their readiness to keep up with the current digital revolution.
That’s why the questions of how and when digital technologies will change the industry are one of the major insurer providers’ concerns. The numbers seem to support this fact:
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However streamlined the insurance industry might be, it is vital to adapt to the speed of digital acceleration and deploy modern technical transformations in order to become the insurer of the future.
This has led to the rise of InsurTech.
New rules set by technology-led disruption
Insurtech refers to the focus on the latest tech advancements aimed to supercharge the current model of an almost 300-year old insurance industry.
Given that insurance is a data-driven sector, it is evident that insurers are poised to make the most of IoT, Big Data, and advanced analytics to stay ahead of the competition. Moreover, such technologies are already in use to solve real business problems:
Also, insurance companies recognize the present-day transition to more customer-centric experiences across multiple channels, as this will bring them one step closer to realizing their digital transformational goals.
Many InsurTechs see the intersection of technology innovation, data-driven culture and user-based principles as a way to better meet the needs of both consumers and insurers.
InsurTech startups are catching the wave
Over the past few years, several InsurTech startups have strived to spark a real digital revolution and take this ancient industry to a new dimension.
Leading accelerators such as Y Combinator, Techstars, 500 Startups, Plug and Play, etc. nurture startup talent to redefine the insurance tech landscape. Crunchbase lists over 200 insurance startups active in all major business lines:
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Though InsurTech startups try to carve their own niche by catering to ever-evolving customer needs and rising expectations, it should be mentioned that they are targeted at a number of common strategic options. The following tendencies top the startups’ wish-list:
- Hyper-personalized products. Various InsurTechs focus on building customized insurance products to retain customers. LeapLife acts as a digital insurance broker providing personalized insurance services based on behavioral data modeling. CaseGlide develops custom insurance solutions including case management, reporting and analytics.
- Automation. According to the estimates, at least sixty percent of all occupations could have one-third of their activities automated. As insurance is not an exception, PlanSource is a platform focused on automated transactions and connecting consumers with insurance providers.
- Increased connectivity. Investments are pouring into startups that digitize their touch points with customers. Thus, Sherpaa connects users with doctors and insurance guides via multiple online channels to cut healthcare costs.
- Data-driven decisions. The scope and scale of data are constantly increasing, so companies utilize new technologies to get valuable insights. Cystellar, for example, is a cloud-based big data analytics platform that help insurers and their clients avoid losses in the food and agriculture sectors. Zipari offers deep analytics to improve the consumer experience in health insurance.
At iTechArt, we always stay on top of all the latest technology trends. Our team combines a startup-mindset with extensive expertise in InsurTech to develop frontline solutions. For instance, our dedicated software development team helped Cover - a platform allowing you to insure literally everything by just taking a picture - perform a range of vital integrations, thus increasing the company’s overall success. They recently attracted a new $16 million Series B round of funding and show no signs of stopping.
What lies ahead
According to CB Insights, InsurTech investment climbed to $2.56B in 2018, showing an almost twofold increase since 2014. And the trend is likely to continue.
Obviously, companies need to usher in a new paradigm in insurance technology if they want to keep pace with the current demands of the digital-enabled world and stay relevant for the years ahead.
The industry is now at a crossroads, and the real challenge for insurers is to understand how to smoothly integrate themselves into a well-established industry and bridge the gap between old and new.
Startups always have a front-row seat to innovation, and that’s why pursuing a partnership with InsurTechs can be a wise decision that will accelerate the development of new insurance ecosystem.