What Is Insurtech?

Insurtech refers to the use of technology innovations designed to find cost savings and efficiency from the current insurance industry model. Insurtech is a combination of the words “insurance” and “technology,” inspired by the term fintech.

Understanding Insurtech

Insurtech is premised on the belief that the insurance industry is ripe for innovation and disruption. Insurtech is exploring avenues that large insurance firms have less incentive to exploit, such as offering ultra-customized policies and social insurance and using new streams of data from Internet-enabled devices to dynamically price premiums accordinꦕg to observed behavior.

Regarding traditional insurance, some people pay more than they should based o🌟n the basic level of data used to group people. Among other things, insurtech is looking to tackle this data and analysis issue head-o🤡n.

Using inputs from all manners of devices, including 澳洲幸运5开奖号码历史查询:geolocation tracking of cars to the activity trackers on our wrists, these companies are building more finely delineated groupings of risk, allowing products to be priced more competitively.

In addition to better pricing models, insurtech startups are testing the waters on a host of potential game-changers. These include using deep learning-trained artificial intelligence (AI) to handle the tasks of brokers and find the right༺ mix of policies to complete an individual’s coverage.

There is also interest in the use of apps to pull disparate policies into one platform for management and monitoring, creating on-demand insurance for micro-events like borrowing a friend's car, and the adoption of the peer-to-peer model to both create customized group coverage and incentivize positive choices through group rebates.

Importance of Insurtech

Insurtech plays an important 🎶part in changing how coverage is applied and paid for in a number of different ways:

• Insurtech enhances the customer experience. By leveraging technology, customers are more engaged in selecting their coverage, understanding their needs, and getting personalized service. Instead of having to travel to a branch or speak to a representative, the future of insurtech is moving towards self-serve, online dealings where customers have their choice of engagement channel.
• Insurtech promotes efficiency. Policy-seekers and policy-holders can often research and explore options using the Internet and apps. Without having to wait for business hours or an available representative, many insurtech companies empower users to quickly access the information they need without being bogged down in processes.
• Insurtech emphasizes individuality. Due to the innovative nature of information gathering and data processing, many new tools (discussed below) are now available to better understand each individual's true needs. This not only improves pricing but delivers more reliable, consistent coverage based on historical data.
• Insurtech improves flexibility. Modern insurtech offerings are more likely to have flexible, customized, short-term, or transferrable plans. Instead of needing to lock into long-term arrangements, insurtech is more likely to give individuals specific coverage for a specific need over a specific duration.
• Insurtech reduces operating costs. Traditional insurance companies relied on 澳洲幸运5开奖号码历史查询:brick-and-mortar locations that necessitated manual labor. Now, insurtech companies can operate remotely with staff engaging with customers around the world. The operating model of the online company is similar with less overhead.
• Insurtech may decrease fraud. By leveraging data, analytics, trend analysis, and machine learning, insurtech companies may be able to detect fraudulent activities if inconsistencies in data arise. In addition, big data may also be able to discover potential loopholes that insurers can seek to close to avoid exploitation.

What Insurance Areas Does Insurtech Solve?

Claims Management

The claims management process traditionally resulted in manually reviewing each claim, deciding wha🐷t compensation to award, and then remitting that compensation. Now, insurtech companies aim to build processes that automate certain processes and detect fraud.

Larger companies can leverage technology to gather and aggregate specific data points regarding specific claims. These claims may also be validated using automation by comparing different data streams. Last, large companies can use automation or re🌞petitive workflows to pay out a large number of claims with minimal human 💟intervention.

Underwriting

The 澳洲幸运5开奖号码历史查询:underwriting process entails reviewing an individual's profile, assessing their risk profile, and extending them an insurance package offer that includes their coverage. The information provided to a client also includes their monthly premium in addition to what compensation they may be ent🐓itled to under various claims.

Much of this data can be mined or gathered automatically. Even if a client must submit information, modern technology uses many data points to compare against historical dataജ that can continually learn, grow, and make more educated assumptions. This means the data decides for itself whether to extend a policy to the individual and what p🦂rice is fair for the associated level of risk.

Contract Execution

Whether it's related to paying out a claim, enforcing a different insurance level tier, closing a customer's policy that has expired, or approving a new customer, there are a tremendous number of contracts that occur related to insurance.

When leveraging blockchain technology, 澳洲幸运5开奖号码历史查询:smart contracts can be triggered to execute when specific criteria are met. This eliminates the human element needing to handle the contract, and this allows an unbiased, neutral party (i.e. technology) to evaluate the criteria of a🧸 contract and decide the appropriate course of action.

Risk Mitigation

As mentioned earlier, big data can be used to gather, analyze, and summarize information. This includes analyzing a customer's historical activity or assessing a broad range of claim types. Based on the information gathered, insurers may be able to detect fraud, protect against unsuitable risk, or better understand where they may be most exposed.

Innovations Driving Insurtech Change

There continues to be a growing, evolving range of technology used in insurtech that changes the way insurance is being performed. Here are the following most notable technologies being le🐻veraged.

Artificial Intelligence/Machine Learning

Artifici🌄al intelligence functions allow certain tasks that previously required human interaction to now be performed exclusi🃏vely reliant on technology.

For example, customers would previously have to interact with representatives to have questions answered; now, interactive discussions with chatbots may allow a customer to receive help without talking to a huma👍n.

A subset of artificial intelligence is machine learning, the ability to extract historical data and compile predictive models. These models are then used to distribute information and may be set to a feedback loop. If future data is fed into the model, the model may "learn" and continually evaluate how to calculate appropriate premiums based on demographics or risk profiles.

Automation

Insurtech change relies on efficiency. This means that when insurance clients fill out a document online, that record is automatically stored in a 澳洲幸运5开奖号码历史查询:data warehouse or used to automatically compile a policy ready for signature. Automation tools are utilized to avoid manual human intervention when technological tools can carꦫry out a process on their own.

Big Data

Big data refers to the collection of massive amounts of information. This includes a broad range of data, the fast collection of real-tꦬime data, and a variety of data ꧙sets.

Big data collection techniques allow insurers to gather a broader set of da✱ta used to analyze the risk profile of a customer to better understand their characteristics and habits. In addition, this information can be gathered for millꦅions of customers and fed into predictive models discussed earlier.

Blockchain

Though most known for 澳洲幸运5开奖号码历史查询:cryptocurrency, the fundamental basis for 𝓀blockchain technology is immutable, distributed ledgers. This allows for unalterable record-keeping to ensure security and reliability in information storage.

It also allows for smart contract execution to reside on a blockchain, remaining dormant until specific conditions are 🌊met to release insurance proceeds or validate an insurance client.

Drones

Insurtech also relies on innovative hardware technologies as well. Drones can be used to assess properties, evaluate property damage where it might have been physic💧ally unsafe for humans to traverse, or audit a site for a claim.

Drones are now becoming increasingly reliant on high-definition photo and video quality, allowing assessors to heavily rely on p𝓡hotographs and stored images from flights.

Internet of Things

Another insurtech innovation that relies on physical innovation is the 澳洲幸运5开奖号码历史查询:Internet of Things (IoT). Though a digital concept, IoT relies on the interaction between physica🍌l goods and software.

For example, auto insurers now commonly offer devices that gauge vehicle speed, handling, and driving habits that can be used to reward positive driving habits or penalize negative driving habits. While this level of information🧜 has never been av🐼ailable before, insurance companies can now base premiums on the smallest of details.

Insurtech Companies

Below are examples of real insღurtech companies and the ways each is innovating the insu😼rance industry.

Lemonade

Lemonade directly sells insurance coverage via a custom mobile app. This coverage is sold directly to the customer as opposed to being transmitted via brokers. Insurance policies include renters' insurance, homeowners' insurance, pet insurance, and auto insurance. All insurance claims processing is performed through the digital platform.💞

Dacadoo

Dacadoo leverages consumer devices such as phones and 澳洲幸运5开奖号码历史查询:smartwatches to gather information via an integrated API. This information crafts individual consumer profiles that allow Dacadoo to assess risk in real time and adjust profiles based on𓂃 positive orℱ negative life improvements.

Bdeo

Bdeo leverages artificial intelligence to improve the claim p♏rocessing experience. Bdeo relies on chatbots to interact with customers to gather claim information꧟.

The chatbot gives directions on what information is needed, how to photograph the♒ damage, and where to input information. Then, remote adjusters analyze the information provided. The company also leverages a computer vision model that utilizes technology to minimize adjustor misevaluations.

Etherisc

Etherisc leverages blockchain technology to utilize smart contracts. Etherisc gathers information from third-party providers. Then, as events unfold, the company is able to have its contracts automatically perform tasks based on outc💝omes that are compared against this third-party information.

For example, 澳洲幸运5开奖号码历史查询:agribusiness insurance claims may automatically🐟 process when specific natural conditions occur; these natural conditions such as rainfall are compared with third-party data to ensure no fraudulent activity may occur.

Avinew

Avinew is a pioneer in the insurtech industry re𒆙garding the Internet of Things technology. The company offers lower premiums to customers who change their driving habits, choose less risky routes, or use an automatic driving system. This information is all possible by onboard devices that track vehicle usage and tendencies.

Criticism of Insurtech

Although many of these innovations are long overdue, there are reasons why the incumbent insurance companies are so reluctant to adapt. Insurance is a highl🦩y reg𓂃ulated industry with many layers of jurisdictional legal baggage to deal with.

As such, the major companies have survived this long by being incredibly cautious, which has made them shy away from working with any startups—let alone startups in their own, veryꦉ stable industry.

This is a bigger problem than it sounds, as many of t✤he insurtech startups still require the help of traditional insurers to handle underwriting and manage catastrophic risk.

That said, as more insurtech startups garner consumer interest with a refined model and a user-friendly approach, they may find that the incumbent plꩲayers warm to the idea of insurtech and become interested in buying up some of the innova🦂tion.

There is also a certain level of privacy that is relinquished when adopting insuಞrtech methodol𝔉ogies. Consider tracking devices that can detect whether you actually stop at stop signs. These devices also track your location, the places you visit, and how long you are at those locations.

For some, this level of data collection and 澳洲幸运5开奖号码历史查询:personally identifiable information is less preferable than the benefit received from the efficient innovation of insurtech.

The Bottom Line

The traditional insurance industry is being disrupted by the introduction of technology. This new sector called insurtech oඣffers customers a new way to do things by gathering information differently, executing contracts more efficiently, and analyzing inf🙈ormation more accurately.

Though some may feel t🎃he insurance industry will be losing a personal touch, insurtech strives to offer lower, more 🍒custom, and more flexible coverage.