They can do this without changing their methodologies and internal infrastructures with technology by their side. Banks have generally taken the cake as far as tech innovation implementations but insurance is a close second place according to our research. From 2014 to 2015, investment in technology grew by 4x. The claims and deals insurance companies have also increased four-fold since 2010. In 2015, tech innovation in insurance received 80% of the funding available (excluding life-insurance).
In fintech, 60%+ of insurance deals were a result of automation and reached the top 20 of most deals in financial services on a global scale. Automation investments range from administrative implementations to full on robotic services. Betterment was invested in by Northwestern Mutual, and other acquisitions have taken place in the last 10 years that act as examples of the evolution of fintech and insurance.
Start-ups are leading the innovation in technology for the insurance space, though. While large firms take longer to pivot and adapt to new implementations, 70% of investment is going to early stage firms that can act as an alternative proposition to incumbent firms.
Insurers are also leveraging hardware that Americans use every day. Wearables and other connected devices help them to determine new product offerings for existing customers. They can also use these devices to determine their needs, and can gather information on how they can build new business.
A study recently showed that 70%+ insurers need to provide a customized experience for their consumers and also make it a top-three priority in their business plan. 80%+ are using data to monitor their consumers, conditions and react to claims/processing appropriately.
2021 and beyond is truly going to be a mark on the evolution of the insurance space as a whole. The growth we should expect to see will be significant and the incumbent firms are making big investments in fintech and technology as a whole.