Insurtech transactions reached a new peak in the second quarter of 2018 – exceeding $5 billion – thanks to Artificial Intelligence (AI) advances in the sector giving insurers more tools to predict risk and utilize new data. In a recent edition of the Q2 2018 Quarterly InsurTech Briefing, CB Insights explores how Life & Health (L&H) has become the leading insurance subsector, highlighting how the business sector’s funding in the last five years is 20% more than Property & Casualty over the same period. Focusing on three areas in the comprehensive report – data, customer and product – the briefing indicates how L&H’s use of AI tools has caused a market disruption through utilizing big data, instituting automation to personalize a customized consumer experience and marketing products as “selling a longer, healthier life.”
The report projects that the use of large amounts of data is becoming increasingly central to the operations of the L&H industry:
The amount of data that can be used to underwrite insurance products is growing exponentially as a result of advances in the understanding of the human body and the proliferation of wearable sensors that can track activity and monitor behaviors in real time. There have also been significant advancements in information handling infrastructure and data science, which have coincided with the explosion of data. Electronic medical records are inevitably going to be a part of our future, regardless of the challenges of implementation and blockchain technology is already being used in human genomics to facilitate integration of health information.
Source: “Quarterly InsurTech Briefing Q2 2018”
However, the associated complexities legally and ethically has the potential for Health and Life Insurers to converge to a conjoined model, resulting in prospective increased M&A activity, according to the briefing.