Insurance companies are acutely aware of the FinTech revolution. Most respondents saw FinTech advances as a threat to their sector. There are compelling reasons to assume that insurance is on the verge of disruptive innovation, whether as a result of an external source, such as the advent of the sharing economy, or the potential to enhance operations via the use of artificial intelligence.
The use of technology in the insurance sector is spurring innovation and assisting it in meeting the requirements of the modern world. Industry disruptors can provide a cutting-edge method for lowering expenses and increasing client engagement. Because of changes in client preferences, fintech may now provide tailored products and services, potentially causing conventional insurers to lose overall market share.
The coronavirus pandemic has hastened healthcare reforms and sparked an InsurTech revolution. When COVID-19 touched landfall, it drove cross-industry digitalization and expedited the rise in InsurTech, which was already a continuously rising sector within the greater tech, startup, and financial worlds. InsurTech firms established records in terms of the most deals and financing in 2020.
According to a Willis Towers Watson analysis, InsurTech companies were able to raise over $2.5 billion in 104 transactions during the third quarter. This is a 63 percent increase in financing from the third to second quarters.
Opportunities Abound: How InsurTech is Transforming Canada's Insurance Industry Click To Tweet
So, What Exactly Is InsurTech?
InsurTech (or Insurance Technology) is the application of technology advancements to revamp the present insurance paradigm in order to save money and increase efficiency.
By utilizing technology, insurers are revolutionizing the way they do business. Through digital channels like smartphones and Big Data, artificial technology has revolutionized how insurers approach their prospects.
With present-day technology, customers can study, compare, and purchase insurance online from the comfort of their computer or smartphone. InsurTech is having an impact on sectors across the board.
Venture investors believe the insurance business is ripe for disruption since the most established organizations have been in operation for as long as 300 years with no change in the way they deliver their goods. InsurTech firms are attempting to offer ultra-customized plans, social insurance, and dynamic pricing premiums through artificial intelligence (AI) and innovation.
Traditionally, insurance operates by assigning policy applicants to risk groups using broad actuarial tables, with enough individuals in comparable categories to make the policies lucrative. These particular policies are then enrolled on a long-term basis, with minimal room for policy change.
How InsurTech Is Completely Changing the Game?
Insurtech will attack this from two angles. To begin, look at big data and price things more competitively. This is accomplished through the use of artificial intelligence, blockchain, and IoT (internet of things).
Insurance, by definition and as mentioned, is based on risk and predicting how dangerous a firm, person, or event is. The more the insurer’s knowledge about the customer, the more accurate the projection. Artificial Intelligence (AI) can analyze data and situations more quickly, boosting accuracy and improving consumer customization.
Blockchain technology is fundamentally secure. As a result, if blockchain is completely integrated into the insurance business, insurance firms will be able to offer prices for new clients quicker than ever before. The old paradigm, in which the corporation must collect data from numerous sources, will be rendered obsolete. Data may be sent immediately from one side to the other, increasing openness and reducing human error.
The Internet of Things is concerned with bridging non-traditional devices to the Internet. The InsurTech startups are leveraging this element to gain access to additional data about potential customers through devices like smartwatches that give live online data.
Second, InsurTech is offering on-demand coverage, allowing users to acquire insurance for their house, vehicle, and trip just when they need it. This on-demand offering, however, is a newbie, but given millennials willingness to buy on-demand and usage products, it is predicted that this offering will turn out to be more mainstream in the Canadian market as soon as it meets the majority of customers’ needs.
What Are the Advantages of InsurTech for Brokers, Carriers, and Clients?
The advantages of InsurTech for each party are listed below. Read on to learn more.
- Brokers and Firms
Insurance agents may use InsurTech to consolidate their workflow, enhance their productivity, and create leads with minimum time spent on administrative activities, allowing them to spend more time with clients.
You may simply quote and compare packages from numerous carriers using superior InsurTech to satisfy the demands of nearly any customer. More individuals can be assisted with this technique, and you won’t have to turn anyone away because they don’t qualify.
Landing pages assist create leads by establishing trust, making more information easily accessible, and allowing for direct interaction with the broker without being aggressive. A landing page gives 24-hour access to your company, satisfying the expectations of consumers for ease and transparency.
CRM features are available at several InsurTech firms. CRM can help you save time by auto-filling customer information or by using a pre-made FNA template. There is also the possibility of generating and utilizing a customized FNA template.
InsurTech enables organizations to operate in teams and interact more effectively. Businesses can take on more work and organize group projects in less time, enabling them to function more efficiently.
Carriers may now gather and analyze data on clients in ways that were previously impossible due to InsurTech. This results in more personalized products and services for clients, allowing them to obtain exactly what they need and want.
For instance, tech giants such as Alibaba and Tesla, have been laying out money in technology, allowing insurance firms to exchange and acquire external data sources, resulting in increased personalization in carrier goods. In the face of digital disruption, it is more like a machine working along with humans than a machine against humans.
InsurTech assists carriers in making their products more accessible to brokers, and thus more accessible to clients.
Convenience, openness, and efficiency are three words that come to mind.
InsurTech will help clients by enhancing their experience via the use of innovative technologies. Consumer needs have grown apparent, but with the aid of insurance technology, these needs can be readily addressed, resulting in the white-glove service consumers seek.
- Personalized Interaction: Brokers and businesses will be able to adjust their approach to the demands of their particular clients using the many insurance tech tools at their disposal. This may be accomplished through tailored quotation methods, the use of communication means that are most effective with the customer, and the opportunity to compare estimates for the client to guarantee the greatest match possible to fulfill all demands.
- Communication: Clients will be able to communicate with brokers through client portals, video calls, and the creation of personalized digital experiences. This provides a sense of convenience since a customer may contact the broker with queries, personal information, and paperwork 24 hours a day, seven days a week.
- Personalized Experiences: Although data collecting and approval of pop-up rules might be intimidating, knowing what the data will be used for puts one at ease that it will enhance everyone’s overall experience. When carriers understand more about their clients, they are able to design increasingly personalized insurance solutions, allowing clients to acquire more of what they require.
What The Rise of InsurTech Exactly Means for Canada?
Based on the prosperity of InsurTech in the following years, we may see what is expected to happen in Canada – collaboration between big insurance firms. Partnerships with InsurTech startups might help insurance companies present themselves as connected, dynamic, and possibly disruptive, allowing them to climb beyond their existing image.
Furthermore, the opportunity to participate in the adoption, enhancement, and development of breakthrough technologies may aid in employee recruitment and retention in Canada. Employees are more happy when they may advance their skills and learn at their own speed. The innovation closely connected with InsurTech focuses on continuous learning and growth, therefore it will be interesting to observe how the InsurTech business evolves and affects the talent market of Canada.
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From carriers to brokers to clients, InsurTech helps the whole sector. Insurance technology isn’t here to replace humans; rather, it’s here to aid, assist, and supplement workflows while increasing ROI.
This space’s future acceleration is predicated on a mutually and collaborative beneficial ecology. This will be crucial for incumbents in order to remain relevant. Collaboration with top disruptors allows new entrants to broaden their products and provide clients with a better range and depth of service. When paired with their well-established dedication to providing exceptional experiences, it presents a strong cause for incumbents to be concerned.
And lastly, the digital transition is here to stay. The worldwide InsurTech market is, in fact, stronger than it has ever been.