Pace of Technology Impact on Insurance Industry Accelerates
Insurtech remains one of the hottest business sectors impacted by an ever-expanding and diversified universe of technical innovation, pulling in vast sums of investment capital and a growing base of key players determined to not be left behind. The original focus on personal lines has shifted to commercial coverage, with blockchain exerting a strong gravitational pull of interest from carriers and major brokerage houses.
According to Venture Scanner, a market research firm that monitors insurance technology, there are now close to 1,500 insurtech companies vying for attention. Funding to date is in the range of $24 billion with one-third of all investment in the past twelve months going into blockchain initiatives. See a list of recent blockchain announcements here.
The wave of technical change sweeping the industry has not been overlooked by Amazon, whose voracious appetite and limitless resources have disrupted, overtaken and fundamentally changed vast swaths of commerce and consumer behavior. With an established presence in the homeowner’s pocketbook through its offering of Alexa and “smart” home devices, Amazon is reported to be considering a pilot program of home insurance in the United Kingdom. In March of 2018 it announced a partnership with J.P. Morgan Chase and Berkshire Hathaway to “rethink” how health care is delivered to their combined 1.2 million employees.
Insurtech innovators appear to roughly fall into two categories: those that develop tools to facilitate business processes and improve the customer experience of incumbent players, and those that seek to dislodge existing insurance businesses entirely.
Forward-thinking carriers are already deeply entrenched in the race for better mousetraps. Accenture calculates the majors could save more than $20 billion annually by replacing legacy systems and processes with artificial intelligence solutions, machine learning, and data analytics. All three areas are the focus of many insurtech solutions on the market right now.
The C-suite has taken notice of all this activity -- firms like The Hartford have set up programs to embrace the new wave of startups and to selectively embed the benefits their solutions afford into their business processes.
Agents and brokers are seeing early gains in productivity through improvement in the application process, with companies such as AVYST allowing for rapid collection of necessary underwriting data and multiple ACORD form submission without manual entry.
Trying to stay on top of new developments is a challenge, but a necessary one. A plethora of trade shows has cropped up to showcase and inform all interested parties to the new world of insurance technology. Blockchain alone has sparked not less than a dozen conferences in several countries over the past year.
It’s an exciting, if not sometimes bewildering, time to be in the industry. Traditionally a laggard in embracing the new, the world of insurance is getting a full body scan with every part subjected to scrutiny and new thinking.
Of course, there are those in the industry who will remain the naysayers and push back against the inevitable. What we know for sure is that the train has left the station and there is no going back. So get onboard now, if you don’t sooner or later you will wish you had.
For further reading on this topic:
Leave a Comment