InsurTech Trends to Watch in 2019
At Breathe Life we always have a finger on the pulse of the industry. Our team is continuously researching market trends to keep up to date with consumer habits as well as the insurance software revolution worldwide. Current technologies are developing rapidly to offer full solutions across different industry niches. The amount of internet savvy consumers is also projected to increase from 1.8 billion today to 5 billion by 2020 as such the demand for online service experiences will grow exponentially.
These are our InsurTech trends to watch for 2019.
The most effective way to innovate isn’t necessarily to take every tech opportunity you see in your industry and try to build it in-house. API’s or Application Programming Interfaces mean that you don’t have to, and they are quickly becoming a driving force for big business InsurTech adoption on a large scale. Enabling white label software products, designed by smaller scale experts, to be embedded directly into the online consumer experience for large corporations pushes for an expedited route to market without lengthy integration or migration periods.
It’s in the Cloud
The cloud has been fully utilized by many industries for some time now. Insurance, however, has been fairly late to the game across multiple technology-based disciplines, but times are changing. This is mostly because trust in the data security of cloud centered options is steadily growing among big carriers. On the back end, new tools are becoming available for insurers to better manage their fragmented workforce in the cloud therefore effectively reducing the associated administrative burden. Initially, adoption elsewhere was for the benefit of IT infrastructure cost reduction, however moving into 2019, with a heavier focus on key data metrics gathering, cloud-based storage and analytics will deliver consumer insights for new growth opportunities.
Data is still King
InsurTech businesses are moving from a start-up focus on the consumer interface to delivering a deeper potential for leveraging data. Data can be used to identify under-insured policyholders, accelerate underwriting using a variety of unique sources such as health records, pharmaceutical records, driving records, wearable sensor data, and advanced lifestyle questions (vaccinations, check-ups, and other activities). Next year will see more platforms harnessing this available applicant data to make more informed policy decisions in a fraction of the time. Wearable and sensor-based technology will be used to reward health-conscious customers and offer additional benefits such as policy riders to the customers that want them the most.
The Chatbots are Coming
Easing digital consumers into the process of engaging with insurers for the first time is being better facilitated by the use of AI chatbots throughout the search for information and application phases. Offering immediate, usable answers to questions that don’t require broker input is making it easier for consumers to understand the products that will work specifically for their needs. It is known that close to 75% of life insurance firms have either established or are seeking investment in chatbot technology over the next 3 years.
It’s in the Algorithm
InsurTech providers are now leveraging the proliferation of other consumer technologies to change the economics behind insurance transactions. The concept of “insurance as a service” is looking to disrupt standard premium costs by instead offering people the option to only insure items when they are actually being used. This is being assisted by IoT sensors and smartphone capabilities that are now more available than ever. Some providers allow users to log what they own via photos that can be uploaded to an algorithm that verifies item condition for differing coverage levels. Companies are going as far as being able to analyze a consumer’s public online identity through photos, thereby determining a life risk profile for that customer.
We started to see the rise in blockchain technologies in the insurance space this year but 2019 will really be the year that the trend takes off. Blockchain technology will become the go-to as we see the growth of fraudulent insurance claims and the increased need for trustworthy software, platforms, and encrypted data storage. One of the biggest issues in the insurance industry is the need for cooperation and coordination amongst many different players which can result in a high level of human error, blockchain technology is the solution to this. We will begin to see it implemented in fraud detection, file management, and sensitive data transmission.
2018 was clearly a fledgling year for InsurTech companies to start rapidly gaining visibility and uptake throughout the industry. Moving into 2019 and those companies are diversifying their product scope with a bid to becoming full-service providers to the complete insurance value chain. Complementary technologies are working together to facilitate the long-awaited change that a new era of digital consumers demand.