Insurtech is an industry buzzword, and it’s taking the insurance world by storm. In a nutshell, insurtech refers to technology-driven innovation in traditional insurance business models.
According to reports, collaborations between insurtech start-ups and dominant insurers have increased by 75 per cent.
An insurtech platform allows insurance companies to tap into new markets, including millennials and the ‘grey market’.
These platforms enable insurers to provide more efficient access to complex product lines. They also help brokers find customers hidden deep within these markets.
The following article will explain what insurtech platforms are, why they are so crucial for insurance companies, and give you some examples of well-known insurtech platforms.
What are Insurtech Platforms?
Insurtech platforms are technological tools that allow insurance companies to interact with customers in new ways. These interactive options enable insurers to track risk exposure better, manage customer data and implement efficient claims processing.
For example, one insurtech platform allows underwriters to incorporate weather data into their business decisions on policies. Another innovator developed an app that lets customers share information about their driving habits with insurers in exchange for lower premiums. This type of platform is beneficial for millennials, who are more likely to buy insurance if they can do so through a mobile app.
Insurtech Platforms are Crucial for Insurance Companies
Insurance companies need to be more innovative than ever before to succeed in today’s market. The speed of technology is too fast for them not to stay ahead of the curve for conventional business models. These platforms are the best way to show customers that insurance companies can keep up with the times.
In addition, technology makes it easier for new players to enter the industry and challenge incumbents. If large insurers don’t innovate as quickly as they should, smaller insurtech start-ups will win over new clients.
Here are the benefits of insurtech platforms.
The more flexibility insurers have, the better they can adapt to shifting market conditions. Some of these platforms are designed specifically for new markets, allowing insurers to target millennials who are less likely to buy certain kinds of policies.
2) Cost Reduction
Using technology is always cheaper than inefficiently using people and resources. The more efficient insurance companies are, the more money they can save.
3) New Business Opportunities
Insurtech platforms allow insurers to reach customers in new ways. These alternative forms of access will give insurers a competitive advantage if they successfully attract new clients from these channels.
4) More Efficient Claims Processes
Insurtech platforms can make claims processing more efficient. They will save insurers time and money, allowing them to expand their business more quickly. They help both with large and small claims.
5) Enhanced Risk Management
These platforms can help insurers manage their risk exposure. They enable insurers to more accurately track customer data, which allows for more efficient underwriting and pricing. Having more accurate customer information reduces writing policies for new markets.
6) Better Compliance
Insurtech platforms make it easier for insurers to comply with new industry standards, such as Solvency II. These standards are essential because they help protect the stability of the insurance sector. When compliance costs go down, insurers can save money on one of their most significant expenses.
7) Complete Interactivity
Insurance companies can use insurtech platforms to remain in contact with customers. They provide real-time information about the market, which helps insurers make better decisions. These platforms also help insurers learn more about their clients, allowing them to improve the accuracy of their product line and develop new products for specific segments.
8) Data Mining
Many insurtech platforms use analytics to help insurers make better business decisions. It allows them to remain competitive on price, for instance, or attract new customers by offering unique products.
9) Faster Access to Capital
Insurtech platforms can simplify and speed up the process of accessing capital. They enable insurers to find new sources of financing while also helping them make better use of existing assets. Because insurtech allows companies to turn their investments into cash quickly, they can access more significant amounts of money than before.
10) Better Fraud Detection
Insurance companies need to be vigilant about preventing and managing fraud. Incorrect claims and other fraudulent activity can cost insurance firms a lot of money and lead to collapse if they’re not handled correctly. The right insurtech platform can help insurers find potential instances of fraud more efficiently, allowing them to minimise their exposure and keep costs down.
Insurtech platforms help insurers improve customer service and reduce overhead. They can also help companies gain access to new markets and gather better information about their customers.
As the insurance industry grows, expect insurtech platforms to be at the forefront of the market’s changes.