Transforming The Insurance Market Thru Insurance Technology
Insurtech is defined as the transformation of traditional insurance companies adapted to the world of new technologies, as well as the startup phenomenon that offers new digital products with an added value to established companies.
Changes in the insurance environment represent new options for the mentality of people who are associated with the technological revolution, with the need not only to secure objects but also different lifestyles.
Among the reasons that can be cited to carry out Insurtech, is that according to the payment of some type of insurance that people have to pay, they do not want to pay more without having any debt, this is measured in a range of All ages. In addition, users have the need for communication to be online 24 hours and without waiting time.
Insurtech has entered the market with the aim of improving the current insurance business model. Globally insurers assimilate the implications of Insurtech, which closes a gap to any comparison with Fintech.
The Insurtech arises as a result of the new needs of the consumer society, of buyers increasingly accustomed to using technological tools in every aspect of their lives.
The collaborative economy is marking the steps of companies with new instruments and an evolving business model, which forces brands to get on the train of digital transformation.
According to a report by CB Insights and KPMG, insurance companies collected 650 million dollars in the first quarter of 2016 compared to 171 million in the first quarter of 2015.
This represents 10% of the 6700 million raised by the Fintech sector in the first quarter of 2016.
KPMG also said that in 2040 vehicle accidents will be reduced by 80%, partly due to the use of autonomous driving, so that new needs arise that represent a change in the services of car-sharing companies.
Among the main features of Insurtech are:
Automation of Processes: The Insurtech try to improve the cost and efficiency in tasks through digitalization. They grant their insured the possibility of real-time monitoring of an accident through an online platform or an app. Currently, only 30% of the processes of the insurance sector are automated.
Collaborative Economy: Emerging new types of collective businesses that require new types of insurance coverage.
Omni-Channeling: Digital platforms appear, facilitating the insured’s communication and interaction in all processes. Communication becomes bidirectional through social networks; it is not only about selling but about establishing and creating a relationship of trust and commitment with the client.
The internet of Things: It is the digitalization of the physical world. It will provide more value to the policies by improving security and saving costs thanks to the processing and transmission of information by objects over people. Example: A toothbrush that indicates how many cavities we have, or a car that tells us if we drive in a rough and violent way.
Personalization of the products: By having more information about the clients, Insurtechs can offer more customized products and adapted with the best measurement of the risks.
84% of insurers could invest in Big Data and 58% of mobile technology, while evaluating the incorporation of emerging technologies such as process automation through artificial intelligence.
The main challenges facing conventional insurers is that they must be more flexible and adapt to the changing preferences of digital native clients, as well as integrate into the new ecosystem and understand their new digital role and respond to changes in the digital market.