JULY 10, 2023
5 min read
The insurance industry, traditionally viewed as a behemoth slow to adapt to change, is undergoing a seismic shift in its operations and customer service thanks to the advent of Insurtech. The fusion of insurance and technology, Insurtech is revolutionizing how insurance companies conduct business, assess risks, and engage with their customers.
As we move further into the digital age, the future of Insurtech holds even more promise, driven by emerging technologies, innovative technology, and new trends. This article aims to provide a comprehensive guide to navigating this evolving landscape.
The Insurtech Landscape: A Snapshot
Insurtech, at its core, leverages technology to streamline and enhance the insurance industry’s operations and customer interactions. Over the last few years, we have seen an explosion of digital insurance offerings, ranging from mobile apps for policy management to AI-enabled chatbots for customer service. These advancements have fundamentally reshaped customer behaviors and expectations, pushing traditional insurers to adapt or risk losing market share.
The main drivers of this digital transformation in insurance have been emerging technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT). These technologies have facilitated more data-driven business models, advanced analytics, better risk assessment, and improved customer experience.
Emerging Technologies Shaping Insurtech
Artificial Intelligence (AI)
AI is becoming a cornerstone in digital transformation for the insurance industry. Insurers use AI for predictive analytics, enhancing their ability to forecast trends, assess risks, and make data-driven decisions. For instance, AI can analyze vast amounts of data to determine patterns suggesting fraudulent activity, helping insurers cut costs and increase efficiency.
Moreover, AI can power chatbots and virtual assistants that improve customer service by offering 24/7 support and instant responses. These AI-driven platforms can answer customer queries, handle claims, process them, and even provide personalized insurance recommendations based on customer data.
Blockchain, the technology underlying cryptocurrencies, has potential applications in Insurtech. Its decentralized and transparent nature can help reduce fraud and streamline administrative and business processes. For example, smart contracts — self-executing contracts with the terms of the agreement directly written into code — could automate claims processing, ensuring faster payouts and greater customer satisfaction.
Internet of Things (IoT)
IoT devices that collect various data streams, such as wearables and smart home devices, provide insurers with real-time customer information. This data can be used to assess risk and price insurance products accurately. For instance, a fitness tracker could provide an insurer with data about a customer’s health and fitness levels, enabling them to offer personalized health insurance policies.
Key Trends in the Future of Insurtech
As insurers collect more data from IoT devices, customer records, and other sources, we move toward more personalized insurance offerings. Insurers can tailor policies based on individual risk profiles, creating a more fair and accurate pricing model.
The digital age has brought about a shift in customer expectations. Customers expect convenience and flexibility, and this extends to their insurance products. On-demand insurance, which allows customers to turn their coverage on and off as needed, is becoming increasingly popular. This model caters to the modern, mobile-first customer, offering insurance organizations to give them control and flexibility.
Another trend reshaping the insurance landscape is peer-to-peer (P2P) insurance. This model allows groups of people to pool their resources and insure each other, reducing costs and fostering a sense of community. With the help of blockchain and digital technology, P2P insurance can be transparent, secure, and efficient.
How DashDevs Can Help You Navigate the Future of Insurtech
At DashDevs, we understand the evolving dynamics of the Insurtech landscape and are equipped to help businesses navigate this terrain. Our team of experts, led by experienced product managers like myself, work closely with clients to understand their needs and design solutions aligning with their business strategy and strategic goals.
We’ve helped businesses in the fintech, healthcare, and retail industries re-engineer their digital processes, resulting in substantial increases in revenue and cost savings. For example, our digital transformation strategy development for established products has allowed these products to grow their user base by 15 times and increase revenue by ten times.
To illustrate the transformational potential of Insurtech, consider the following real-world applications of emerging technologies:
- Friendsurance: A social insurance solution that groups individuals with the same coverage. Cashback rewards incentivize the group to make fewer and smaller claims, reducing false claims and helping insurers manage risk.
- TrueMotion: An insurtech that uses smartphone sensor technology to score drivers based on behavior, helping insurers attract and retain the safest, most profitable drivers.
- Goji: A platform that uses personal history to help purchasers connect with the best insurer available at the best cost. This enables accurate, selective pricing, reducing risk for underwriters.
- StrongArm Tech: An insurtech focused on improving the well-being of industrial workers. Data from sensors worn by workers allows for more accurate pricing and the development of preventative solutions for injury.
The future of insurance distribution and insurtech is bright, with the global market size valued at USD 5.45 billion in 2022 and expected to expand at a compound annual growth rate of 52.7% from 2023 to 2030. The increasing number of insurance claims worldwide is a significant factor accentuating the market growth. According to a 2021 study by the Insurance Barometer, 36% of American respondents planned to purchase life insurance in 2021.
Moreover, digital technologies are becoming increasingly critical for tech companies in understanding customer needs and enhancing insurance offerings. A survey by EIS Group revealed that 59% of insurance companies increased their investment in digital infrastructure in 2021. With its cost savings, faster payments, and fraud mitigation benefits, blockchain technology is driving its demand among insurance companies worldwide.
Insurance companies are also beginning to accept cryptocurrency-based payments. For instance, in December 2021, Metromile, an auto insurance company, announced its plan to allow policyholders to pay premiums and claim payments using cryptocurrency.
Finally, consumers’ demand for on-demand insurance is growing as it enables them to purchase insurance coverage on their smartphones at their convenience. Businesses in the on-demand insurance space increasingly use innovative technologies such as the Internet of Things, artificial intelligence, big data, machine learning, and predictive maintenance to reinvent how on-demand insurance products are underwritten, created, and distributed.
In conclusion, emerging technologies, business systems, and trends are reshaping the Insurtech landscape, offering new opportunities for innovation, efficiency, and customer engagement in the insurance sector. As these technologies continue to evolve, they will enable insurers to provide personalized, flexible, and efficient services that meet their customers’ changing needs and expectations. At DashDevs, we’re excited to help businesses navigate this dynamic future and leverage these technologies to their advantage.
Stay ahead of the curve and explore new technologies and the future of Insurtech with DashDevs.