While 2018 witnessed the expansion and exploration of insurance technology (InsurTech) in real time, the focus in 2019 is all about engagement and relationships.
The booming InsurTech industry hit a quarterly financing volume of $1.2 billion in Q3 of 2018 – up $749 million already from Q2.
2019 promises a new horizon for digital acceleration and innovative integration of technology for better customer experience and retention. Here are three trends to keep an eye on in 2019.
Exploring data analytics is a core component of what InsurTech can offer companies. InsurTech is revolutionizing insurance by introducing big data analytics to optimize products and services. As a result, major investments are being poured into data analytics and modeling techniques. From consumer behavior to the ROI of marketing campaigns, insurers want to be able to leverage the information to turn big data into actionable and revenue generating steps.
Until recently, one of the hardest parts of extracting actionable insights from the data is its sheer size. There are not enough hours in the day to effectively and efficiently channel such a large amount of information into concrete findings. That’s where machine learning comes into play. With this new advancement, companies can sift through enormous quantities of information with even better accuracy and efficiency. Not only can machine learning be leveraged on historical data to glean insights on past trends, it can also be used proactively to shape products and operations. Machine learning has applications in everything from marketing to pricing strategies to claims.
The underwriting models of insurance companies are largely a black box in the eyes of consumers. But in the information age, transparency is key to establishing trust and attracting new customers. Consumers are accustomed to shopping for everything online – from clothing to real estate. They want pricing and product information to be up front and comparable so they feel better informed about their choices. With online marketplaces, customers are able compare prices and benefits side by side. As personalized data becomes more reliable and available, more of the underwriting process itself can be automated. This trend towards complete underwriting automation creates an opportunity for the elimination of the traditional distribution channels. Speeding up the process can also have a considerable impact on a consumer’s likelihood to purchase. Thanks to emerging technologies, using richer customer data to drive intelligent decision-making together with a growing investment in content to deliver rich experiences, provide all the ingredients for personalized journeys that satisfy consumers whilst strengthening business performance for insurance firms.
Now that InsurTech has become a solid industry, the need for investments and partnerships between insurers and innovators has never been higher. InsurTech is creating new abilities, from tasks to analytics, transforming the entire insurance industry on a fundamental level. And companies that won’t adapt to the increasing digitalization of insurance are at a high risk of falling behind. To illustrate, a recent study by Accenture found that 86 percent of insurance leaders who responded acknowledged that keeping pace with InsurTech advancements was essential to remaining competitive.
Identifying and understanding a company’s unique InsurTech needs and creating associated solutions is right in our wheelhouse at Penguin.Tech. Our team of professionals understand that the insurance industry is on the cusp of a digital revolution and look forward to helping new and existing clients stay ahead of the digital curve. Our progressive framework can help bridge that digital divide.