Technology has burst into the insurance sector and the word insurtech is beginning to make a dent in our everyday language. Surely you have heard of insurtech or the insurtech sector, although you may not be entirely clear what this concept refers to.
The word "insurtech" is an acronym for two English words: insurance and technology, which is often abbreviated as tech. And it can be defined as the branch of fintech (another acronym that defines financial and technology companies) that is dedicated to the world of insurance. That is, we refer to technological innovation in the world of insurance. Thus, we speak of startups or insurtech companies when several insurance companies that use technology to develop their business are grouped together or, more generically, of "insurtech" or "insurtech sector". The conjunction of insurance and technology.
The truth is that technological innovation in the field of insurance is something assumed by everyone in this new era of coexistence between traditional insurers and those that provide new models focused on the opportunities offered by technological advances, as revealed in the first edition of the World InsurTech Report prepared by the consulting firm Capgemini and Efma after interviewing 140 executives from the insurance sector in 33 different markets, including Colombia, Chile, Peru, Spain, Brazil, and the United States. Among the conclusions of the report, it highlights the adaptability and extraordinary competitive advantages of insurtech, which "will be a catalyst that redefines the customer experience, offers generalized efficiencies and creates new business models."
Because the insurance sector is transforming and insurtech companies have a lot to do with this transformation. While 67.1% of traditional insurers believe that "they can redefine the customer experience", 91.7% of insurtech are sure of improving the customer experience.
The vast majority of companies focus on collaboration to develop new solutions. Because new digital tools and capabilities would be of no use if they were not directly related to collaborating with the client to help you choose the insurance that is best for you.
A previous report by consulting firm, PwC, “Opportunities awaits: How InsurTech is reshaping insurance”, already found in 2016 that the insurance sector was in full transformation and that 3 out of 4 companies were aware that they needed to change to keep up of what your customers need. And the insurtech sector has not stopped growing since then, both in a number of companies and in investment. Associations such as the Spanish Fintech and Insurtech Association (AEFI) have emerged in parallel in different countries, which aim to create a favorable environment for startups and companies operating in the field of technology applied to finance and insurance. Its goal is to enable financial innovation to accelerate.
The digital revolution has also reached insurance, but still smooth. There is still a long way to go for the sector to understand globally that the digital consumer is looking for an agile, transparent and competitive relationship with insurance, adapted to their new habits and needs.