InsurTech: How Technology Disrupts Traditional Business

What is insurtech?

Artificial Intelligence & Machine Learning: predictive analytics and automation

How it works:

Solutions:

Virtual personal assistants allow for AI-based customer data analysis for custom policy tailoring, complementary services or policy extension.

Predictive analytics powered by machine learning prevents expenses on claims by predicting environmental catastrophes, helps salespeople qualify leads with improved targeting.

Robotic process automation facilitate the work of agents by claims staging, bundling services and automatic task completion.

Example:

Internet of Things: connected devices and real-time data

How it works:

Solutions:

Connected home may include climate, energy, water, lighting control, window and door sensors that help monitor their usage and enhance customer experience with customized policies. What is even more important, one can install flood and fire detectors that will notify emergency services in case of danger.

Wearables track the lifestyle to collect the data as it is in addition to doctor reports and standards. It is mostly a value-added solution, which is not the incentive in decision-making.

Telematics devices are installed into a car to track the time of the day and night when someone is driving, the speed, mileage, intensity of acceleration or pressing brakes. Then, they send reports to the insurance company to customize the policy for each vehicle.

Example:

Blockchain: database security and connectivity

How it works:

Solutions:

Blockchain for P2P insurance combination ensures automation through smart contracts and guarantees payout to blockchain residents.

Data verification allows for minimization or reduction of error, as an insurance company doesn’t need to rely on customer’s version of the truth.

IoT enablement allows sensor hardware and devices to send information in real time with increased transparency.

Example:

Elinext in Insurtech

Some predictions from Elinext

The main challenge for insurtech today is the improvement of insurance value chain; however, this focus will be switched to disintermediation, P2P models, and blockchain, reducing the delivery time and cost.

Freshly emerging insurtechs are a bit cautious about stepping in the new industry and try to concentrate on some single area. Further on, the entire value chain will be rethought with full-stack digital insurers, which will provide lifestyle policy including everything from property to health and travels.

Insurtech will connect closer to fintech by consolidating full-stack digital policies with wealth management tools and robo-advisors.

Final Thoughts