In this article, as Insurtech Part 1, the author is going to give you an Introduction of What is Insurtech? & Why it has seen an explosive growth? The case studies will follow soon.
What is Insurtech?
Insurtech, the word itself sums up stating that it is a combination of insurance and technology. The beginning of Insurtech marks the recent phase of digital and technological transformation of the traditional insurance industry. It is a term coined to refer to the innovative creations in the insurance sector with the help of technology in order to save costs, make startups just as common in insurance industry as they are in any other industry and has been seen as an attempt to disrupt the traditional well settled insurance market by new start ups’ innovations giving much better experience to draw customers.
Why is insurtech seen as an explosive growth in past few years?
Efficient Intermediate Procedures
Despite the fact that the initial set up costs are high in Insurtech, the Insurtech startups such as lemonade , friendsurance have received large sums of money for investments. The new forms of processes that have developed are more efficient in intermediation procedures and claims management.
Great Customer Experience
They provide a great customer experience by the application of Artificial Intelligence. They also demand less commission for products from the policyholder due to less dependency on agent based selling and more on technically equipped marketing. Due to the growing popularity of such innovative startups that have driven the market crazy and completely unpredictable regarding the traditional insurance industry, the traditional Insurance Keymen have started investing in these start ups to be a strategic stakeholder in their progress.
Change of Traditional Insurance Model
There are certain features that these Insurtech startups have (which are discussed in detail in later case studies) to attract customers to provide a whole new experience – whether it is charging a flat fee or giving customers a satisfaction to contribute to charity and donations of their choice out of the premiums they pay. It is obvious that the combination of variety of features have contributed to an explosive growth in past few years. More than 1000 start ups currently make the Global Insurtech Industry which are backed by more than $18 billion in committed funding.
How is Insurtech reshaping the global insurance market?
For knowing how the startups are changing the global insurance market and are on a way to disrupt the traditional insurance industry, we will have to look at the following case studies in our upcoming article that show the significant facts related to some of the top Insurtech startups. These will help us ponder how they are structurally, functionally and radically different from the old insurance industry and way better and advanced and capable of reshaping the industry.
Do you think that the rise of Insurtech will benefit the society in a significant manner? Let us know.