When most people think of FinTech and the influence it has had on modern society, the first thing that comes to mind are banking and the financial sector, and for good reason. This being said, the mark FinTech has made and continues to make on the world extends far beyond banking and cryptocurrencies. As FinTech grows and expands its reach, so does its influence on things like real estate, the medical sector, private lending and insurance, the latter of which is aptly referred to as “InsurTech.”
So, what exactly is InsurTech, anyway?
The term itself is a direct relative of FinTech, which was born of “Financial” and “Technology;” InsurTech is, as you might guess, a mash-up of “Insurance” and “Technology.” Companies working in the InsurTech space are largely interested in breathing new life into the insurance industry by using many of the same revolutionary technologies which form the backbone of FinTech.
In other words, what FinTech is to the financial sector, InsurTech is to insurance—a focused attempt at utilizing burgeoning technologies to help take the industry to an entirely new level of performance and client satisfaction.
Future of InsurTech
The future of InsurTech holds a great deal of promise for both consumers and key players operating in the insurance space. Here are just a few ways in which InsurTech is shaking things up, and why now is the perfect time to start paying attention.
Reduced Cost for Underwriting
One of the biggest challenges often faced by underwriters is collating and assimilating large stacks of information. While there are a handful of tools that help automate the underwriting process to a certain degree, nothing compares to the extent to which InsurTech can simplify things when utilized to its full potential. From user device data to the use of drone footage in home insurance policy underwriting, InsurTech is essentially limitless in how it can help underwriters perform their jobs successfully.
More Attractive Insurance Rates
Just about every consumer in the world would prefer to pay less on their insurance premiums, no matter how low they already happen to be. While the future adoption of self-driving cars will almost surely work to lower insurance rates, a more immediate use case can be seen in fitness trackers and apps, which health insurance providers can extract data from for determining policy rates based upon the work an individual puts in. It’s a key push in the direction of mass adoption of this type of technology, and it’s coming sooner than most people think.
Enhanced Billing Functionality
Billing has long been a central element of the insurance world, and that’s not likely to change anytime soon. What is slated to change in the near future, however, is how billing is approached by companies both large and small. From automatic payments and reminders based upon specific sets of criteria to flexibility with types of payments and accepted forms of currency—including cryptocurrencies like Bitcoin and Ethereum)—billing in the InsurTech age will be enhanced for both consumers and the companies they work with.
Reduced Instances of Fraud
Anyone who has become the victim of fraud knows just how important security is when it comes to financial technology, and InsurTech is no exception to the rule. Fortunately, technologies in this space are actively working to debase and prevent fraudulent activity, thanks in large part to automated processes, robust analytics and constantly updated security protocols. Two-factor identification and other hallmarks of FinTech innovation are just the beginning when it comes to securing the insurance industry and everyone who interacts with it.
New Methods of Distribution
Today, customers are looking for something more from their insurance providers than what they’ve been used to getting in the past—namely, the freedom of choice and flexibility when it comes to how policies are designed and purchased. InsurTech aims to bring new methods of distribution to the space, such as peer-to-peer (P2P) models with allow for customized packages as well as saved time and money. Just as FinTech has revolutionized the way currencies are managed worldwide, InsurTech will surely cause a seachange in how insurance policies are bought and sold.
At True North, we build leading FinTech products designed for tech and financial services companies looking to offer cutting-edge commodities to clients and customers. Contact us today to learn more about how we can help take your offerings to the next level.