What is the biggest impact insurtech has had on insurance?
What is the biggest impact insurtech has had on insurance? | Insurance Business Asia
Insurance News
What is the biggest impact insurtech has had on insurance?
Insurance experts share their views
Insurance News
By
Jen Frost
Insurance Business caught up with attendees of Insuretech Connect Las Vegas to find out what they believe insurtech’s biggest impact has been on the industry – and while there were some common themes, everybody had a different take.
From accelerator, to liberator, to equalizer, a variety of attendees at Insuretech Connect’s November conference believed that insurtech has had a role to play in re-shaping the insurance industry, though perhaps not necessarily in the disruptive guise that was originally anticipated by some.
For Tim Hardcastle, Instanda CEO and co-founder, insurtech has proven itself to be insurance’s “liberator” and now offers a “rainbow of hope and aspiration”.
“A lot of the insurance community are very innovative and they’d like to do more for their customers, and they’d like to be more creative, and a lot of people we’ve talked to are held back from being able to do that, because of the processes that they’re forced to use, or the technology that they’re using is not relevant, or it’s not suitable for today’s customer needs,” Hardcastle told Insurance Business.
“I think a lot of the technology vendors treat the insurance companies quite badly – I have been a consumer of software services from my previous role, so I’m not talking from a theoretical perspective, I know, practically, what it’s really like.”
Ultimately, in Hardcastle’s view, insurtech is “providing a much better way for customers”.
“The great thing about insurtech is that over the last few years, it’s grown in momentum, it’s grown in impact – you can look at that from an investment standpoint, in terms of where funding has gone, you can look at it in terms of number of companies that are working with insurtechs,” Hardcastle said. “I can look at it through my own lens of the clients that we’re now working with and the impact that we’re now making.”
Changing insurtech – from disruptive promises to partnership opportunities
For others, what it means to be an insurtech has shifted. Gone are the days of disruptive promises, according to Bob Sargent, CEO of eSpecialty and co-founder of the InsurTech Association (ITA).
“In some sense, the concept of insurtech started out as disruptive technology, or almost replacement of incumbents – and that, to me, is really negative on the insurance business,” said Sargent. “Today, it’s all about enabling technology and working with people in the business, and that’s the part I like.
“The opportunity today is to apply technology in a way that has a significant impact on enabling current participants to be much better and much more efficient at what they’re doing.”
Brooks Tingle, John Hancock CEO, also reflected on a move from disruptive rhetoric to accelerating partnerships.
“I can remember the first time I was here, the insurtech folks referred to the carriers as dinosaurs, and then more recently I hear carriers refer to the insurtechs as failed enterprises,” Tingle said. “The reality is we really need each other and [at John Hancock] we try very carefully to partner with people, because I’m very proud of leading 161-year-old company – and trust me I’m confident I can hire the best folks in a bunch of disciplines, but it would take a lot of hubris for me to say I’m confident I can hire the very best people in every single field.”
Areas like mobile, digital, and behavioral sciences are potential partnership areas that insurers with long legacies “don’t have a long history of being great at”, Tingle acknowledged.
“The legacy to date has been pushing the industry forward in a very positive way,” Tingle said. “And then this learning that we need to be working together – it’s not insurtech or incumbents, it’s how do we partner to create more value for customers?”
For Kenneth Tolson, Crawford & Company global president, network solutions, insurtech now “touches practically every part of the insurance ecosystem”.
Claims-focused Crawford has seen big benefits from its insurtech partnerships, Tolson shared.
“Twenty-five (25) years ago, nothing happened this fast, and what I love about it is that we can adapt and change and innovate and integrate into what is a very traditional and conservative business model,” Tolson said. “To see that sort of appetite for acceleration [in the traditionally risk averse insurance industry] is really encouraging to me.
“In the end, the centre of it all is really innovating to drive better experiences for the customer.”
Insurtech as an agent of change and a promoter of insurance carrier competition
Meanwhile, technology has been an “integral agent of change”, said Allister Yu, SVP at Rhoads, which has a compliance technology focus.
“Insurtech has been critical in the velocity in which the insurance industry has grown, whether through AI automation, or value chain delivery technology,” Yu said.
It has also served as an equalizer, according to Denise Tyson, founder and CEO of Schaefer City Technologies, a startup business focused on predictive analytics around nuclear verdicts.
“It’s allowed mid-sized and smaller carriers to compete with big carriers – the technology they can buy now has been too difficult to build when running smaller carriers,” Tyson said.
Insurtech has also boosted the “development of massive amounts of data”, which has had a big impact on businesses’ abilities to understand themselves and serve their customers, according to Sasha Korol, Duck Creek senior director of research & innovation.
Tide of technology innovation and change ‘inevitable’, say insurtech leaders
Many insurtechs and incumbents may be looking past disruption and on to partnership, but some business leaders do feel that there is more change to come, particularly as it relates to underserved customers.
For Omar Kaywan, Goose Insurance co-founder and chief growth officer, insurtech’s biggest impact has been that it has “made insurance more accessible and scalable”, with a significant amount of investment having taken place across the insurance value chain.
“Insurtech has made a significant amount of impact, because the good old broker channel’s human-based approach is not scalable, and it is eroding,” Kaywan said.
For Kaywan, the questions of today are: “How do we use technology to make insurance more accessible for consumers to buy? And how do we use technology to build better products that are relevant to today’s customers’ needs, utilising insurance market and technology?”
“The insurance industry is truly the foundation for our global economy and it has at times failed to embrace technology,” Jennings said.
Insurtechs themselves, carriers, MGAs, brokers, and customers are all set to benefit from recent improvements, in the CEO’s view.
“We will write better risk, we will be more predictive, we’ll be able to help customers run their businesses more effectively, and it’ll be more profitable for those who are providing those services,” said Jennings. “Technologies come in one way or another, and you can fight the tide as much as you want, but it is how it is going to happen.”
For Jennings, emerging technologies like advanced AI, machine learning, and big data offer a “swell of amazing opportunities” to add value.
“I think that’s extremely exciting,” said Jennings. “Few spaces in industry can really look and say that they have an opportunity to take technology to do something hyper impactful and transformative at this scale, as we have today.”
What is the single biggest impact insurtech has had on insurance? Let us know your view in the comments.
Keep up with the latest news and events
Join our mailing list, it’s free!
