Much like the leaders in the financial services industry, insurance leaders are slow to adopt new technologies. With heavy regulations and oversight from governmental institutions, their pragmatism serves them well. Change introduces risk into the business, and sometimes the devil you know is better than the devil you don’t. Yet, tipping the scales on the other side is the risk of missed opportunity. Insurance is increasingly competitive, with larger carriers expanding into additional revenue streams and using their brand recognition to capitalize on larger shares of the market. Mixed in with these competitive influences, is the use of technology to create an advantage and “out-operate” the competition. As the battle of the risks play out, insurers are left with a critical decision on whether to invest in new technologies or not…
Just as FinTech investment has grown by 20x over the last decade, Insurtech is no different. Coatue Capital’s recent studies show that 59% of insurance executives are increasing their budget for technology investment in 2021. Private equity and venture capital funds are allocating significant portions of their capital to Insurtech investments, surging the market with new technology that will help transform the industry. Now, more than ever, there is an opportunity for insurers and brokers to digitally transform their businesses and enable their employees to become more purpose driven in how they interact with the goals of the organization.
New technology, like predictive risk scoring for underwriting and claims management, is designed to help insurers better assess their policy holders and expose large scale trends across the business. All aimed at reducing their combined ratio and driving better policies into the business. Other organizations, like AgentSync, are solving the challenge of credential management for agents and brokers. This streamlined platform solves a major compliance problem that carriers, brokerages, and agencies all grapple with, in a fully integrated point solution. And the list goes on – ClarionDoor, OWIT, Appulate, Hourly, Lemonade, Pie, MetroMile, and so many others, have developed solutions that tie in with critical operational systems for insurers or are new insurance vendors that have capitalized on segments of the insurance industry with technology. The intent being to replace manual and mundane processes that can be automated through software.
Over the course of the next decade, the Insurance Industry will succumb to a deep transformation of their processes and ultimately, core competencies for operation. Technology will lead the charge in helping shape a purpose driven experience for employees, effectively “digitally transforming” the industry into the 21st century and beyond.