Insurance is often described as one of the world’s most traditional industries, but innovators seek to disrupt it with new technology just as they have done with the financial services industry as a whole.
Numerous InsurTech businesses have cropped up offering new solutions while teams within insurance incumbents strive to innovate and are faced with similar if not bigger challenges than their banking counterparts.
Last week, our Shaping FinTech webinar was chaired by Lou Smith, Chief Digital Officer at Lloyd’s, and the panellists included Wrisk’s Executive Chairman Niall Barton, Flock CEO and Chairman of the UK Insurtech Board Ed Leon Klinger, and Deloitte Digital Partner and InsurTech Insiders Co-Host Nigel Walsh.
You can view the webinar below, but here are a few things we learned.
InsurTech will be hit as hard as any other industry amid Covid-19. InsurTech has seen, much like FinTech, a fall in investment due to the global pandemic but it is now beginning to see a recovery from Q2. There have been some high-profile drop-outs over the past few months, and it may even be impacted more than the pure FinTech space since it’s very much a fledgling industry trying to find its feet. Insurance is also an area that will require enormous funding. Overall, the dramatic reduction in funding has, unsurprisingly, mainly hit those just starting out in the industry.
Consumers need flexibility now more than ever. One thing Covid-19 has highlighted is the importance of digital disruption and the need to make the sector work for everyone. From a consumer perspective, people simply don’t know what life will look like within the coming weeks and months so they are unlikely to commit to a product if their needs and resources could change.
Although exacerbated by Covid, people are already used to subscription services like Netflix where they can get free trials, opt in and opt out – so there will be an even further push for this when it comes to insurance products going forward, and the technology infrastructure to back this will be vital.
Transparency will be even more vital going forward. As with other experiences like Netflix, from FitBits to neobanking apps, consumers want to understand their own behaviour better and are used to having data at their fingertips. Now, people want to know why their policies will be priced a certain way, and while traditionally insurance has kept these details under a veil in some ways, this will no longer be an option. While insurance providers themselves won’t rush to do this, demand will come from the “middle man” businesses such as retailers and car manufacturers to help them offer added value for customers.