The investment in insurtechs smashed records in Q1 2019. Outside of the investments, there has been several factors that continues to drive innovation in the insurance industry. Customer expectations are also driving innovation, as businesses evolve from the manufacturing business model to the platform ecosystem. Furthermore, platform companies can sell their customers anything and everything based on the data they’ve collected about them, and have perfected the consumer experience.
There has been shifts in the insurance landscape to the benefit of traditional insurance players, says Sophia Yen, insurance strategy and innovation leader at EY:
“We’ve seen the pendulum swing from a total disaggregation that was the birth of all the insurtechs. If you look at some of the more successful insurtechs, they’ve taken out a piece of the vertical of the insurance value chain, and they’ve specifically made that component easy to do business with, or heightened that customer experience, but that left us with a very fragmented ecosystem…In the last 18 to 24 months, legacy traditional companies are saying, ‘which insurtechs do I need to pay attention to’, either that ‘they’re taking away some of my business’ or that ‘I should partner, align, and do business with’…We’re starting to see aggregation and we’re starting to see heightened M&A activity across the board, and part of that is fueled by the capital surpluses that most of our companies are enjoying right now, and needing to put that surplus to work. While we’re seeing a lot of innovation happen on the frontend around the customer experience, I think there’s a lot of room to grow around making our underwriting decisions faster, quicker, better; making our actuarial decisions faster, quicker, better; and ensuring that the claims process is akin to a client experience that we experience in other segments and aspects of our lives.”
Whether it’s blockchain or artificial intelligence, both of which will likely continue to disrupt the insurance industry, insurance executives need to stay at the forefront of technology and how it can help enhance their business processes.
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