Insurtech uses technology to innovate traditional insurance models; it is the main driver behind open insurance. As fintech was for the finance industry, with open banking setting the new agenda, insurtech stems from the same theory. It aims to leverage modern solutions and upgrade the insurance industry – involving both new and old players. By using emerging technologies, the insurtech sector streamlines processes, strengthens business efficiency, and improves customer experiences.
The drivers behind insurtech.
Data sharing and third party access to data is the foundation of insurtech. It cannot function without the legislative steps that have been taken to facilitate open insurance, such as the Payment Services Directive (PSD2) in the EU. The data sharing that is the base of insurtech is most often done via APIs (application program interfaces) and is the definition of open insurance.
With insurtech comes massive amounts of information and structured and unstructured data, also known as big data. Apart from understanding customers better by relying on statistics, insurers can also use big data for underwriting, pricing, claims handling, and much more. And with new technology constantly emerging, big data will only get bigger and enable more possibilities.
Insurtech relies on efficiency in which automation plays a big part. With automation, the lead time of a process can often be reduced. Automation tools allow customers to avoid unnecessary human intervention when filling out a document or gathering data in real time. These are examples of the kinds of tasks that automation can process much more quickly.
Artificial intelligence within insurtech allows insurers to use technology for certain tasks that previously required human interaction. It’s not meant to replace human interaction between insurer and customer completely. Instead, it works to streamline processes where it is needed, such as chatbots to complement customer service.
What is the difference between insurtech and fintech?
The financial and insurance sectors are similar in that processes are often slow and cumbersome. However, the emerging technology allows for data to be leveraged in new ways. Fintech functions within a wide net of financial institutions and services, while insurtech operates under the umbrella of fintech and focuses on innovating the insurance industry. Insurtech offers new methods that are better suited to our digital way of living. It benefits all customers in the insurance industry, just as fintech did for the financial industry.
At Insurely, we dedicate ourselves to open insurance with insurtech at the core. Read more about it in our blog.
Insurtech’s win-win experiences.
With insurtech, customers will experience a smoother process to research their insurance, buy an insurance product, or get help from customer service. Whether or not the customer will interact with certain technology directly, like AI chatbots, insurtech will be present in all processes to simplify the customer experience.
Partnering with insurtechs will help insurers streamline internal processes and develop their existing products – all in a simple way without having to acquire internal expertise, tools, or applications. This is necessary to drive growth and develop new relevant products to keep up with the ever-changing digital landscape.
In insurtech, banks and insurers collaborate to streamline customer experiences, such as enabling customers to provide their personal information just once. In order to compete in the fast-moving digital landscape, bancassurance and insurance will continue to co-create digital insurance platforms that provide customers with seamless buying processes.
We’re here to help.
The insurance industry doesn’t need to change – but an update doesn’t hurt. Want to learn how you can grow your business through the power of open insurance? Contact us.