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The successful rise of fintech has inspired a similar wave of technological innovation in the insurance sector, as more companies are looking for ways to serve their customers.
Read More: GlobalFintechSeries Interview with Tim Kelly, CEO & Founder at BitOoda
InsuraGuest Technologies Inc. is one of the companies in this arena, providing software that eases the provision of insurance for specialist sectors. W.R. Berkley Corporation is adapting through the reorganization of its business, combining divisions and creating new ones as insurance necessitates change. Berkshire Hathaway Inc., like many other insurers, relies on data and analytics to constantly improve its understanding of the market and of insurance customers’ needs. Fairfax Financial Holdings Ltd. is invested in a range of insurance companies around the world, providing the financial support for insurtech innovations. And AON plc is experimenting with disruptive technology, such as blockchain in its insurance products, and has gained industry recognition for its work on cyber insurance.
- Insurance technology (insurtech) is on the rise, providing innovative, integrated systems.
- The technology has attracted $16.5 billion of investment over a decade; the rate of investment is increasing.
- To make the most of this, companies need to adapt approaches to insurance and the way that they work with providers.
The Rise of Insurtech
Recent years have seen fintech — financial technology — become one of the biggest buzzwords in investment. Technology is revolutionizing the way that money works, from huge successes such as contactless payments to intriguing experiments like cryptocurrency. This has made finance easier to manage for consumers and businesses, and provided countless opportunities for investors along the way.
That heightened pace of change has taken hold in the insurance market. In one survey, 74% of insurance companies said that they saw fintech innovations as a challenge for their industry, while 43% were putting it at the heart of their corporate strategies. Insurtech — insurance technology — is the new game in town, applying the lessons learned from fintech and the potential of modern technology to create innovation and opportunity within the insurance sector.
Read More: GlobalFintechSeries Interview with Raymond Wyand, CEO & Co-founder at gini
Where Technology and Insurance Meet
Insurtech is currently being driven not by the big providers but by the innovations of start-ups. Companies such as InsuraGuest Technologies Inc. are targeting particular niches with their insurance systems, using this approach as an opportunity to innovate and capture a specific market before expanding their offerings to a wider audience. The different insurance needs of different markets allow insurtech companies to provide added value by tailoring to specific needs of clients while building systems that can be adapted elsewhere.
The example of InsuraGuest shows how this can work. InsuraGuest is an insurtech company that has initiated its distribution by catering to hospitality sector before it expands its product offerings into revenue streams. ISGI combines insurance provision with software as a service (SaaS) to provide hotels and vacation rentals easy access to the insurance coverages they need to protect their properties, both covering gaps in existing insurance packages and making it easier to arrange and deliver new insurance products.
