The insurance industry may be a very old profession, but, like the many industries in the developed world, in the last few years it has been undergoing a revolution. Industry specific software and technology has been changing the way companies relate to their clients – and those old established companies either adapt to the new ways of working or get left behind as brokers adopt new InsurTech focused models of business.
What Is InsurTech?
Like many new words that seem to appear suddenly and quickly become everyday vernacular, InsurTech (used interchangeably as insurtech depending on who is writing the word) is simply a catchy way to say “Insurance Technology”. That is, the software and technology that has been designed specifically to work within the different arms of the insurance industry, as well as forming modular systems that work together. For a startup software business, a software company insurance is necessary to cover any costs from damages that may arise from unforeseen events.
Insurtech has really only been around since 2010 but is making sweeping changes within the industry. One of the key focuses on both the companies that are engaging software developers to build systems for them, and the startups that have built new businesses based around their insurtech software is customer service.
Of course, as with any start up or new technology, there have been difficulties in insurtech gaining enough financing to really shake up the insurance industries, but initial hurdles seem to have been mostly overcome, and customers are now starting to see the benefits of an insurance industry with new life and new focus.
The Advantage InsurTech offers to Customers
As a customer you may have noticed advertising for insurance products aimed at particular consumer groups including drivers under 25yrs with a clean driving record and women over 75years who are in great health. This is because using insurance technology the insurance companies are able to use datamining of big data (see here) to create highly specific groups of people that don’t fit into the normal actuarial tables.
Traditionally male drivers under the age of 25 years have been considered a very high risk according to the actuarial tables that insurance companies use to set policies, meaning that in order to not loose money when insuring young drivers, companies have set broad policies that cover all drivers under this age. With the introduction of insurtech they are able to policies that represent a better risk assessment. What this means is that many drivers with an excellent driving record, are driving safe cars, and always have their vehicle parked undercover, are able to be offered a better premium than they would have if they remain grouped as a young, inexperienced, accident prone under 25-year-old driver.
Equally there has been a number of advertisements targeted at health insurance for women over 75 years of age, who are fitter and healthier than at any other time in history. This means that insurtech datamining has been able to provide risk assessments which allow cheaper premiums to be offered to members of this group.
The Advantage InsurTech offers to Brokers
One of the biggest advantages that the development of specialist software designed for the insurance industry is increasing automation and customer management on the go. Not only is good insurance software able to ensure that your customers are getting the best deal on their policy, but you as a broker, are able to make sure that there are no boxes left unticked. It does no good to your reputation if you have signed your client up for a policy that won’t ever be paid out because you forgot to ask the right questions.
One of the problems of using software to run policies in the past has been trying to keep up with changes in legislation, as well as policy updates and differing offers from the different insurance companies. However, modern insurance specific software is designed with this in mind, so is able to be easily updated, and in some cases even automated. Meaning that you can be assured you are always giving your clients the right, and most up to date, information.
With so much fearmongering around about how automation will kill jobs, there is sometimes a resistance to introducing these systems in the insurance office. However, automation doesn’t mean the end of brokers, it means the end of having to do all the repetitive jobs that you don’t need nor want to be doing. The calculations for complex underwriting will be easier and back office accounting can happen without you needing to have reminders in your calendar.
However, one of the keys to automation is the ability to customise it to fit your needs. Not only so that you aren’t having to wade through redundant menus to get to the information that you need, but by increasing the efficiency of staff you help to improve customer service – and happy customers are repeat customers. Being able to speak to the company that is designing InsurTech for you means that you will be more likely to ask for features that fit better with the way your products work. https://fintechnz.org.nz/2019/04/11/most-insurtechs-want-to-improve-customer-experience/
InsurTech On The Go
Of course, one of the challenges to the insurance industry is the advent of mobile technology and a gig economy. People expect to be able to sort their entire life while sitting on their phone, sipping coffee in a café. Few people are willing to spend hours on the telephone getting their insurance sorted, or even spend 30 minutes on a desktop working their way through an online form – no matter how easy your company thinks it is to fill out.
Insurance brokers need to ensure that any technology they implement is able to fit the changing needs of their customers. If you are a face to face broker who is on the road meeting your clients, you need to be able to work with a modular system that will allow you to bring the office to your clients. If you want clients to be able to renew or update their polices, you need to ensure that there is an effective, and very secure, system in place that will allow them to do so using mobile technology.