What is InsurTech and How Does it Affect the Insurance Business?
by Seven Peaks on Nov 7, 2023 11:21:36 AM
In a world driven by technology, InsurTech is a topic that's gaining interest within and outside the insurance industry. Let's take a comprehensive look at InsurTech to understand its essence and significance. Whether you're an insurance business entrepreneur or a consumer, this insight will help you progress toward your objectives.
What is InsurTech?
The term InsurTech is a fusion of "insurance" and "technology," and its significance is as direct as these two words imply. It represents technological advancements aiming to elevate the insurance business by enhancing service efficiency and reducing costs.
InsurTech is part of FinTech, a component of the digital transformation powering the insurance sector into the digital age.
How InsurTech Can Aid the Insurance Business
InsurTech offers a vast array of assistance to both businesses and consumers:
- Potential insurance buyers can directly purchase insurance plans via online platforms without the need to contact agents as previously required.
- The system facilitates the analysis of individual consumers, enabling tailored insurance proposals.
- Insurance companies can calculate personalized insurance premiums for individual consumers using an intelligent system, ensuring customer satisfaction. Accurate premiums can be determined based on income, risk, and various other variables. For instance, car insurance factors in vehicle service lifetime, gender, and marital status for more precise calculations, thus reducing errors in manual calculations.
- Consumers can make paperless claims and receive prompt compensation as all data is synchronized across platforms, particularly beneficial for Human Resources personnel managing large crowds.
- Insurers can significantly reduce costs associated with hiring insurance agents and sales personnel. With InsurTech, numerous processes can be automatically executed via online systems linked to databases.
- Insurers implementing InsurTech often gain better consumer recognition, perceived as a modern and reliable choice.
- InsurTech enables the creation of more relevant insurance plans that better meet today's consumers' needs.
These reasons have initiated numerous insurance companies and startups to invest more in InsurTech than ever before, resulting in continuous industry growth. Market.us anticipated that the InsurTech market's value will surpass USD 336.5 billion by 2032, with a compound annual growth rate (CAGR) of 41%.
Global InsurTech market growth chart by Market.us
InsurTech Implementation in Thailand and Overseas
Several companies have embraced InsurTech to boost business efficiency:
- Office of Insurance Commission (OIC): Collaborating with over 60 insurance companies, the OIC is developing the Insurance Bureau System utilizing big data as the central insurance data. This ensures faster processes, fairer premiums and compensation, and minimizes risks from insurance fraud.
- Roojai: An online insurance company that allows consumers to compare insurance plans directly from their application or website with an API connected to multiple payment methods. The company uses tokenization technology for secure credit card information storage, enabling automatic payments and GPS-based claims in case of accidents.
- Thaivivat: An insurance company offering Active Health insurance for consumers wearing smartwatches to reduce insurance premiums for regular exercisers. They also offer 'on and off' car insurance, employing IoT devices to calculate insurance premiums based on actual car usage. Consumers can report accidents, locate service garages, or extend coverage through their application. Furthermore, Thaivivat has invested in startups to introduce MARS Inspect, an AI that can inspect a car's condition in real time.
- ClaimDi: An application for car insurance that allows consumers to file claims without waiting for an agent. Users can log crucial details, including pictures, dates, and locations, with or without disputants.
- Lemonade: An American insurance company using an AI chatbot to interact with consumers. They utilize Mixpanel, a leading product analysis tool, to analyze consumer information and propose personalized insurance plans, ensuring competitive premiums. This can all be accessed through their responsive application, which is able to process an insurance claim in as little as three seconds.
- Vouch: Another American insurance company utilizing AI to analyze consumer data, focusing on offering specialized insurance plans for startup businesses, covering various types of insurance products including cybersecurity, digital product bugs, and employee fraud, among others.
The integration of new technologies such as big data, AI, and IoT aids in promoting user-friendliness, fairness in deals, and meeting specialized consumer needs within the insurance business. These aspects of InsurTech draw both entrepreneurs and consumers, ensuring sustained growth and a leading position in the industry.
Build Your InsurTech Solutions with Seven Peaks
If you're in the insurance business, InsurTech could significantly enhance your business's growth. Whether you aim to boost service efficiency or reduce operational costs, we can make your desired InsurTech solution a reality.
Place your trust in seasoned software development teamswho have collaborated with prominent names in the insurance industry.
Consult with us to start today.