4 Insurtech trends and concepts to be mindful of in 2021
Insurtech is an established but fast growing portion of the insurance industry—its prominence and advancements driven by a demand for customization, convenience and simplification of process.
Insurtech technology offers consumers unprecedented control over their immediate and long-term insurance needs, while stand alone insurtech companies disrupt traditional, and at times frustrating, norms associated with buying insurance.
The following 4 trends have emerged as important talking points when we consider the increased use of these technologies and the forces that drive them.
1. A customized data-driven approach
Data is gold. Properly interpreted, a user’s information can be utilized to provide services and products that organically become part of their lives. Knowing when a user is making consequential financial or life choices can help insurance entities contact customers at the times they need to reevaluate their coverage on the platforms they are most likely to engage through.
2. Process automation
Every process within the insurance industry is heavily data-dependent, and insurtech can help to reduce this at times consuming and inaccurate part of the process. Process automation, made possible by machine learning, robotic processing, and other developing forms of cognitive automation can greatly reduce internal workloads, and on the customer-facing side of things.
Data entry, claims processing, policy management and even underwriting can draw upon existing user data, reducing input time, avoiding policy redundancy and generating a better overall customer experience.
3. Pay as you go. Pay for the policy you need right now.
Usage-based programs allow customers to gain coverage in the short-term, delivering policies that cover events in the short term, as opposed to the blanket coverage of a long-term policy. Insurtech apps allow users to quickly assess their insurance needs and purchase a policy that meets those needs in the short term.
4. Removing the intermediary
The insurance industry has traditionally relied upon intermediaries to handle the transaction that occurs between customer and provider. Smart contracts eliminate that step. Smart contracts are stored as code on a blockchain and then, when predetermined conditions are met, the terms of the contract are enforced automatically.
Common usage of this part of the insurtech arsenal increases transparency by eliminating a third party, speeds up claim processing due to the automation, and lowers overall administrative costs. It is a safe and secure way to ensure all agreements are met and, as a bonus, reduces the potential for fraud by, again, reducing the relative distance between an insurer and their customer.
Insurtech companies and technology usage is growing because consumers and insurance entities want to cut costs, improve customer service and build relationships that are more convenient. At The James Allen Companies, we want our clients to develop those resources that will allow them to remain competitive in future markets.