The coronavirus crisis has changed every industry overnight, including the insurance industry—for insurtech startups and incumbents alike.
It’s true in every industry: Digital is taking over. It’s not a new transformation, but it’s certainly a pertinent one, with companies globally enforcing remote work policies amidst the current public health crisis.
Incumbent insurance providers have struggled with digital transformation for some time now. While innovative technologies, like cloud processing and virtual sales, provide salient opportunities, these large firms are struggling to adopt them quickly and efficiently.
The current health crisis has made these efforts even more difficult. However, we believe that the current state of business and the economy provides an opportunity for organizations to get their innovation program up and running.
Let’s dive a little bit deeper into disruption in insurance before coronavirus upended businesses, opening up the discussion for how innovation-minded firms can come out on the other side more agile.
Before: Disruptive Startups and Tech
Perhaps the greatest source of competition for insurance incumbents has been smaller, technologically forward-thinking insurtech firms.
Insurtech firms are often startups, which are, by nature, used to working digitally. They’re also usually small, meaning that the adoption of new technologies doesn’t have to go through the same bureaucratic process as in larger firms.
We’ve included some of the most disruptive, innovative pieces of tech these startups have been able to quickly adopt below.
Machine Learning and AI
Automated technology touches all aspects of the insurance business, including the information systems that form the backbone of an insurance company. When new data is added to the information system’s database, AI will allow the system to automatically update its predictions and outputs. Insights into customer needs and demographics will also be constantly adapting with the business in real time, allowing the company to make quick, accurate assessments.
The Internet of Things (IoT)
The Internet of Things, or IoT, refers to the physical products with integrated computer technology that allows for product customization and easy, accurate data collection.
As such, IoT-enabled technologies can asssist in claims at the point of incident. For example, a vehicle with smart technology can report instantly all collectable data in involved in an accident, including driving speed, damaged areas, and time of day. Underwriting for accidents, then, is far more efficient and accurate than other traditional methods.
Online sales tech have been been a highly relevant disruptor because it has already been adopted, at least partially, by the majority of insurers on the market. If an insurer hasn’t yet brought their sales process online, they’re already behind.
Online sales provides customers with value as they’re able to get instant quotes online with little hassle, and compare and contrast different policies. Online assistance in the form of chat bots, interactive help sections of websites, and other help solutions make the customer experience more enjoyable. Insurers can also conduct policy management through their website and customer’s email.
Before the coronavirus crisis, insrutech startups assisted larger companies through partnerships, integrating these digital and innovative software solutions to them without the need for the training and investment. In the past, larger firms saw a boost to their bottom line with this help, as through a reduction in administrative costs in the underwriting process.
However, large firms need to be aware that some insurtech companies have high goals and are starting to take away from entire components of business—a case that’s especially true now where businesses are scaling back production and consumer reach.
After: Looking At Other Industries for Direction
Large firms should take this time to view their competition and the tech they’re employing—as well as looking outside insurance for inspiration.
“It is about trying to ascertain exactly what the customer journey looks like,” said Raj Bosamia, technology director of Iprism. “You have to see what works and what doesn’t work and ask why it doesn’t work.” This means looking at service delivery and not just the technology. The aim has to be to define what customer expectations might be.“Roundtable: The rush to technology,” Insurance Post
Once businesses are able to kick back into high-gear, many will have a focus on bringing in new customers. Insurance firms that invest in innovative technology and processes that highlight the customer experience while engaging employees will be a vital differentiator.