Dear insurance industry … don’t just do digital, be digital and succeed

Daniel Rademeyer, Senior Director - Insurance Practice

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The invention of the wheel is one of the most fundamental step changes seen in our everyday lives. The wheel-shaped the way we do everything from transportation to modern-day machinery and everything in between.

Just as the wheel created new opportunities back then, the same is happening with technology in today’s modern world, especially within the insurance industry. Large incumbents still rule the sector with a huge market share but beware of the silent, yet nimble insurtechs coming up the main street. For the first time in insurance history, more than half of customers are willing to consider getting insurance from non-traditional or big tech companies. Why would this be?

In the 4th edition of the World Insurtech Report 2021, we continue with the CARE equation (C – Convenience, A – Advice and RE – Reach) which drives the key findings within the report. We look at the technology trend groups that create new opportunities for insurtech’s to enter the market. What the driving force and the enablers for the growth of insurtech in the market is and what the consumer at the end demand from current and new entrants to the insurance market.

With more than 50% of consumers looking at new entrants to the insurance market, the expectation of enjoying and experiencing the same high standard of customer experience when interacting with the Big Techs’ digital platforms is a big pulling force. In addition, the increase of embedded insurance at the time of purchase with non-traditional and original equipment manufacturers (OEM) is the drive to uptake insurance by introducing insurance as part of the sales process.

Insurtech’s are not climbing the insurance industry ladder alone; Reinsurers is an enabler by providing underwriting capacity and investments which position Insurtechs to deliver digital tools for a range of product offers. As investment capital enables analytics at scale and turns data into value, Insurtechs provide solutions through technology use for the industry. Incumbents are partnering or acquiring Insurtechs to focus on providing products that would not have been possible in such short timeframes to the market.

Insurtech’s are focusing investments on developing actionable insights that drive deeper customer engagement from policyholders via AI/predictive modelling, IoT/connected devices, and APIs/open insurance to increasingly improve Reach and Convenience. As these technologies become mainstream, future focused insurers will need to augment advanced data handling capabilities to onboard data from multiple sources, standardization, and interoperability, while keeping an eye on privacy and ethical concerns.

The drive to simplify and to boost the understanding of what customers buy for their protection and the expectation of a smooth customer experience should be the same as what they get when interacting with the Big Techs. Insurtechs are perfectly positioned to step into the space and to offer a bundled and seamless experience. By keeping customers at the centre of the experience, , the message to the rest of the players in the insurance industry is clear, don’t just do digital, be digital and succeed.

For further detail and insights, you can access the World Insurtech Report 2021 here – https://worldinsurtechreport.com/ or reach out to Daniel Rademeyer or Pranay Desai.

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