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What insurtech means for insurance customers

February 7, 2018

Gallagher has jumped onboard with Insurtech Australia, an organisation launched in October 2017 to network with global counterparts to facilitate global collaboration in adopting insurance technology.

Gallagher is one of a number of corporate partners in Insurtech Australia which joins InTech London, Insurtech Asia and Fintech NZ as members of the Global InsurTech Alliance (GITA).

Insurtech AustraliaInsurtech Australia is a branch of Fintech Australia, and is concerned with the same technologies that are transforming the banking industry: blockchain, artificial intelligence (AI) and the internet of things (IoT).

Some doomsayers have predicted these digital tools signal the demise of traditional client-broker relationships, by enabling insurance customers to sign up online for the policies they want, but that’s over-simplifying the scope of insurtech in the insurance industry.

Insurtech refers to both the technology and the start-ups that are emerging as new players in the insurance space and transforming historic products into radically more flexible and granular offerings. These include:

  1. Automated services
    Digital broking platforms let users shop for policies from different insurers and manage them on their phone or renew, claim or compare premiums online. Some of these services are targeting small businesses, even enabling them to check their suppliers’ cover.

  2. On-demand insuranceOn-demand insurance
    Using an app as a portal, customers can buy short-term or on-demand policies for limited periods or cover for specific items activated and deactivated by swiping the surface of a smartphone.

  3. Peer-to -peer insurance
    Part of the share economy (airbnb, Uber), peer to peer insurance participants pool their money with their friends for lower premiums (based on the supposed lower likelihood of fraudulent claims through leveraging the trust factor), who get a portion of their premium back at the end of a claim-free year or have it donated to a customer-nominated charity.

  4. Chatbots
    Already popping up on some websites, chatbots are AI-powered virtual customer service representatives that provide relevant information to online inquiries. Joe Hukum, a technology specialist in the insurance sector, claims chatbots such as the UK’s SPIXII are responsible for capturing as much as 350 per cent more leads and 35 per cent more conversions for the companies that are using them.

  5. The internet of things
    Imagine if your car could renew its own insurance. The IoT goes well beyond devices, with smart items monitoring their own functionality and alerting owners to potential issues before they occur. This plays into the evolving role of insurance advisors in preventing problems ‒ and reducing costs for everyone involved.

  6. Blockchain
    This network-shared, decentralised and tamper-proof public ledger enables secure financial transactions between multiple parties that are transparent in real time to the participants. European insurance giants Aegon, Allianz, Munich Re, Swiss Re and Zurich have teamed up for a pilot proof-of-concept project testing the use of blockchain in insurance.

    Big data analytics
  7. Big data analytics
    Beyond telematics, data analysis reporting has the capacity to provide specific customer information that can enable insurers to accurately calculate risks and create programs for difficult to place clients.

  8. New business models
    Across the industry insurance companies are looking to harness insurtech capabilities, either to enhance their offerings or to improve efficiency and decrease costs by automating parts of their operations that are time consuming without providing direct perceived value to their customers.In this respect insurtech can help insurers spend more time on core business and provides insights to enable more personalised and relevant service, from responses to inquiries to claims processing.

Fintech start-ups themselves present complex risk profiles that require broker expertise and specialised knowledge to create programs that meet their insurance needs. Increasingly these types of clients are becoming an important ‒ and growing ‒ market sector.

If your business is a tech-based start-up, talk to one of our specialist brokers to find out what we can do to tailor a program that meets your insurance needs.