Insurtech companies specialize in developing cutting-edge technologies for use in the insurance sector. These technologies are improving and in some cases replacing existing insurance services, making the entire insurance process simpler and more efficient for both brokers and customers.
There are many different elements and areas of specialism in Insurtech, including Artificial Intelligence, machine learning, drones, and the Internet of Things. Artificial Intelligence (AI), a term most of us already know, refers to the use of software and programs to perform tasks which previously required human problem-solving.
One of the most well-known examples of AI in consumer insurance is the use of chatbots, which can answer customer queries promptly and accurately, improving customer experience and freeing up valuable staff for more important tasks at the same time.
The Internet of Things (IoT) is a fascinating glimpse into the future of Insurtech. IoT is a network of ordinary appliances and objects which are connected to the internet for the purposes of collecting, retrieving, and sending data. Smart watches, for example, can now be connected directly to the internet without a smartphone and log near real time health data to the cloud that could be used to calculate health insurance premiums.
Telematics is another great example of how IoT is changing insurance; for example, telematics can be used to store and send data from a vehicle about a driver's habits, including speed, braking patterns, acceleration and distance driven, in order to inform policy-making and risk assessment decisions.
Insurtech has applications across the entire insurance process from customer service to underwriting, submission triaging and risk analysis. The purposes of Insurtech innovations are not just to streamline work for insurers and brokers - they're also designed to make finding policies and making claims easier for customers.
Insurtech will allow insurance providers to offer tailored, secure and convenient insurance policies to customers who will have the choice of hundreds of insurance policies at their fingertips - literally.
The insurance industry is changing. Within a decade, telematics will drive car insurance policies and customers will be able to drop in and out of such insurance policies on a pay-per-use basis.
Wearable devices and smartphones will send data to brokers to inform policy decisions and risk assessments. Smart contracts will make managing customer policies and claims simple, transparent and secure. Insurance providers who don't invest in Insurtech will slowly be squeezed out of a changing market, which is why it's important for forward-thinking insurers to recognise the role of Insurtech in their industry today.