A handy guide to InsurTech, what it is and how does it affect you?

Have you been hearing several buzzwords regarding insurance that leaves you completely confused? We get it, insurance is an ever-evolving industry, and keeping up with it can be difficult. This is why Assurekit is here to explain some of these buzzwords to you. You can use this as a handy guide to InsurTech and understand how it affects you.

 

Each month we’ll be picking a buzzword and will make an easy-to-understand handy guide for you. #AssureBuzz

 

The buzzword for the month of June is – InsurTech.

 

To give you a complete overview of InsurTech our product head and experience in technology, Rishi Iyer, is going to explain InsurTech to us. Connect with him on Linkedin to learn more.

 

So, what is InsurTech, really?

 

Rishi: InsurTech is simply a combination of the words – insurance and technology.

 

Sure but what does that mean?

 

According to Investopedia – “Insurtech refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model.”

 

It is basically the technology that lies behind the innovation in insurance. Apart from being a budding niche for venture capitalists to invest in and watch grow, it also helps the insurance industry serve people better. The industry is at a point of change and InsurTech is leading the way forward.

 

It leads the way to make the insurance industry quicker, more democratized, more efficient, and more personalized.

 

What does InsurTech include?

 

Insurtech is simply using technology to make insurance easier. To actually understand it let us look at a few examples –

 

1.   Get the recommended the best insurance plan for the end customer

 

How? The software uses AI to improve underwriting logic. This helps it understand the right policy for Sanjana who has two kids and travels a lot and the right policy for Rohan who never leaves the couch. Saving your end-customer time and pitching the right policy for them.

2. Increased automation and reduced operational overhead

 

Using process automation software, InsurTechs reduce the heavy operational overhead that comes with managing insurance programs. This gives way to reduced costs and more investment in building the future.

     

3. Intuitive channels for distributing insurance

 

InsurTechs work on improving insurance distribution channels by making them more intuitive, more secure, be reachable anywhere through cloud-based web and mobile apps.

 

You can read more about it here.

 

How does InsurTech change things?

 

For a long time, insurance has been seen as a necessary evil – something that you have to do. We want to change that. Here are a few ways InsurTechs are working on doing exactly that –

 

–        Make insurance eCommerce seamless and more accessible

–        Use data-driven models to make underwriting more accurate and less time consuming

–        Help educate the masses to the need for various insurance

–        Improve claims process, increasing the ease of claims initiation and approval

–        Reducing insurance fraud

 

It is safe to say that the experience of buying an insurance policy can be improved. However, it isn’t as simple a job as you may think. It requires the right technology to support it along with data safety and security for the end-user.

 

This is where InsurTechs comes into the picture. By using technology insurers are able to give a 100% digital experience, process policies faster, lower their costs for policyholders, give tailor-made policies and do much more.

 

By using technologies like IoT, Blockchain, automation and much more – the insurance industry is able to truly change the way you think about insurance.

 

How does InsurTech affect you?

 

The real question is that why should you pay attention to it? How is technology in insurance going to affect you?

 

To start with, it is going to change how you buy or sell insurance. Easier, more reliable, and efficient insurance is good for everybody. The company, the insurer, and the economy at large will see the benefits of it. It brings equality and less standardisation into the world of insurance where some people would be paying less for more risk coverage than others. This depends from person to person. 

 

For example, if someone is going on a week-long trip to Indonesia and the other person is going on a trip to a virus-infected country – the cost of that shouldn’t be the same for both people. The person taking more risk should be the only one paying more.

 

In the past, it wasn’t possible to create a different insurance plan for every single customer but today it is.

 

Their data can be analyzed by various means i.e wearable tracking devices, car trackers, etc and an insurance plan can be created for them accordingly. This will help the companies price more effectively and give better plans to each individual. While this is a dream, it will take time to implement it.

 

Apart from giving better pricing models to people, InsurTechs will also help customers have the right mix of complete policies for them with the help of Artificial intelligence and deep learning. This will give them tailor-made advice to make an informed choice. If there are still doubts, the Indian insurance industry has intermediaries who can assist the customer in real-time.

 

If you are an insurance company executive or an employee you may be looking at a few major changes in your industry.

 

How to be one step ahead

As with any new piece of technology reading and learning about it will always be beneficial. Keep a track of all the updates on the technology and how things change. Insurance is an industry that goes through major changes every few years so keeping yourself up to date will be a useful thing to do.

 

Keep a look at the new startups in your country to know where the industry will be heading towards.

 

InsurTech in India

 

Speaking from a focus point of just India we have seen the consumer’s behaviour change over the last decade. Where consumers used to visit offices to enquire about health, auto, or life insurance. Today the consumer is used to buying products online and expects the same service and convenience for insurance.

 

However, in India InsurTech still has a long way to go. It is lagging behind the developed world when it comes to using technology in insurance. New-age startups are driving the adoption of technology in insurance.

 

Retail insurance of traditional products like motor and health are sold online but there is still a lot of scope for other not-so-well-known products like renters insurance, affinity insurance products etc. to be sold further too.

 

While in the BFSI space insurance lagging the most, but then again is consequently also providing the most opportunities for disruption.

 

It is an interesting time to be in the InsurTech space. The stakes are high and the opportunity is huge. I am thrilled to see what insurance will look like in the coming few years. I am even happier to be with Assurekit who is a part of leading that change.

 

Conclusion

 

Thank you Rishi Iyer for taking the time to take us through the various aspects of InsurTech. Rishi is the chief product officer at Assurekit. To learn more from him check out his Linkedin.

 

InsurTech is coming. Watching the industry adjust to it is very interesting. What is more interesting is how the Indian insurance companies are shifting their focus towards consumer-centric methods of operating. From making the processes faster for them and creating personalized quotes, we are improving as an industry and are moving towards a better future. We’ll just have to see where InsurTech startups lead the way and what level of customer service can be achieved.

 

We help businesses become mini InsurTech in itself. To know more about Assurekit check us out here or fill up this form to join the waitlist.

 

Citations – TheBalanceS