| | February 201919insurance providers have tried to in-crease their digital distribution capac-ity through their own online channels or through partnerships with aggrega-tors/comparison websites. However, there remained a strong need from an insurance customer's perspective of a one-stop shop.The Advent of Insurtech Companies in Insurance DistributionInsurtech companies are typically technology led companies that have entered the insurance space. To start with, most of these companies focused primarily on the development of ag-gregation platforms/chatbots without any significant insurance experience or know-how. Proofs of concepts and frequent nurturing by insurance pro-viders have helped these companies to develop solutions that have innovative ways of reaching out to the consumer. Insurtech companies took advantage of the fact that young digital-savvy customers tend to treat insurance like other financial products & services, and were therefore seeking to transact digitally without directly interacting with the insurance provider. Also, the same customer prefers a chat-based interface to interact with her insur-ance provider as compared to having a telephonic or a face-to-face conver-sation. The new digital-savvy cus-tomer does not mind paying a small amount for travel insurance while paying for an overseas or domes-tic travel, nor do they think multiple times before buying a home insurance contents & burglary policy while pay-ing for their electricity bill using their payment wallet.Enabling New Product DevelopmentThe advent of Insurtech companies to meet the needs of a digital-savvy consumer have also helped insurance providers identify new products. The ability to interpret significant consum-er behaviour data and insights about customers is now enabling insurance providers, with the help of Insurtech companies, to be able to provide per-sonalized products that better meets the expectation of consumers. Ex-amples include (a) allowing custom-ers to buy insurance only on days that they drive their car basis the kms driven; (b) allowing customers to get discounts on the days they go running basis the kms run and num-ber of steps taken; (c) buying cover for adventure sports on a holiday; (d) merchants buying insurance cover for product returns. Moving up the Insurance Value ChainWhile most of the Insurtech compa-nies are focused on increasing digital distribution or distributing new prod-ucts in the digital ecosystem, there are very few Insurtech companies that are focusing on the core function of an insurance provider, namely claims and customer service. Taking advan-tage of the high availability of data, a few Insurtech companies have ven-tured into the field of artificial intelli-gence and machine learning. With the help of technologies like computer vision and deep learning, these In-surtech companies are working with insurance providers on use cases such as automatic damage assessment of motor claims, auto-adjudication of claims using artificial intelligence and machine learning, anomaly and outlier detection of garages and hos-pitals to curb over-charging. Simi-larly, Insurtech companies are also working on identifying fraudulent customers using image and video detection algorithms.Transforming Risk ManagementWith a number of devices already connected using the Internet of Things (IoT) including Telematics devices, smart homes, IoT devices in industri-al corporations, there exists an abun-dance of data for insurance providers. Telematics devices help in better un-derstanding driving behaviour of indi-viduals and can also help alter driving behaviour to mitigate accidents. Smart home data is helping insurance pro-viders send real-time alerts in case of an accident at a home and many a times help predict an accident before it happens. Similarly, IoT devices in industrial corporations are helping to prevent short-circuits, predict failure of machinery and avert large accidents in the workplace. All this is helping in-surance providers work with corporate and retail customers to provide com-prehensive risk management solutions in addition to simple risk transfer. Exciting Times Lie Ahead for Both the Insurance Provider & Insurtech CompaniesAs Insurtech companies continue to explore new areas with insurance pro-viders, they are also challenging the way insurance providers are reaching out to customers and the way they are servicing them. This healthy compe-tition is definitely helping customers as they seek new ways of buying tra-ditional commoditized products and also look at easier ways for obtain-ing service from insurance providers. Similarly, advances in artificial intelli-gence and machine learning will help insurance providers in lowering oper-ational costs, improving segmentation and providing comprehensive risk management solutions for corporates. Insurance providers are helping start-ups in discovering new high-impact business use cases. Leveraging their technological know-how, these start-ups are tailoring their business models to solve these challenges and become more Insurtech focused. Looking for-ward, interesting and exciting times lie ahead for both the Insurtech and the insurance sector.
< Page 9 | Page 11 >