Insurtech has been gaining popularity within the same insurance industry that was previously hesitant for change. Technological innovation is disruptive. It leads to valuable insights, streamlined business processes, and lower overhead costs. In other words, the benefits of Insurtech outweigh the risks. So why has Insurtech been met with reluctance over the past decade?
Why consider Insurtech?
Adaptation of new technology can be unnerving, especially within a field that must adhere to various strict regulations and jurisdictional guidelines. Many insurance companies may not have been comfortable with the prospect of an Insurtech startup handling regulation compliance and risk management. For this reason, many insurtech startups partner with traditional insurers for underwriting purposes and to ensure immaculate risk management processes.
We are in a digital era that is experiencing unprecedented data science technology growth and development. Business intelligence practices have helped bridge the gap between software technology and business processes by providing innovative ways to strategize workflow. Industries that have relied on the same methods for years may feel comfortable with technological stagnation. Still, to continue improving and remaining competitive in a saturated market, opening your organization to innovative technology is a bright idea.
Consumers today tend to prioritize convenience and simplicity above all else. The proof is in the success of web-based businesses. Food delivery, telehealth, car sales, and real estate platforms have gravitated towards application management. Many consumers dislike talking on the phone, let alone going into an insurance agency or broker’s office to discuss options. One of the most popular practices in choosing insurance today is using an online tool that compares your options for you.
So how can insurance companies benefit from these conditions? One example is in the mixing of policies or consideration of group coverage. The ins and outs of insurance can be a tedious and complex subject for many people who lack experience or knowledge of the industry. Through the use of artificial intelligence, business models can be improved to automate policy matching. Deep learning can also eliminate the confusing process of optimizing a person’s coverage, a task that many people need the help of a broker to accomplish.
Accurate Demographic Models
In traditional insurance procedures, coverage and eligibility can rest on any number of factors. These aspects can include an individual’s car color, gender, age, and state requirements. Through the use of Insurtech, data scientists can examine more detailed demographic information. For example, primary usage and vehicle sharing among friends and family. Using this information to build better peer models can heighten risk management and allow further customization of insurance policies.
Time and Money Saving Opportunities
Big data is created and made available more rapidly than ever before. Harnessing the power of this data can help insurance companies utilize it to improve upon business models and processes. A few examples of these uses are predictive analytics, prescriptive analytics, and data governance. When business processes are streamlined, business owners can focus their employees’ time and efforts towards better serving customers or the company. Employing data science experts or partnering with an Insurtech startup can streamline your regular processes and give valuable insight into areas that need improvement.
For consumers, the insurance industry has many options. Being able to stand out from competitors means adapting to new tech platforms and using them to enhance your competitive edge. The aspects mentioned above are just a few possible benefits that Insurtech can introduce to insurance companies. The possibilities of utilizing data are nearly limitless. Further insights into Insurtech and its impact on the insurance industry can be found on TIBCO’s website, an industry leader in data science software.