One of the more popular applications of insurance technology (insurtech) is direct insurance, where technology cuts out intermediaries such as brokers by directly linking carriers and customers.
Naturally, this causes some concern among insurance intermediaries, with fears arising that technology could render them obsolete – but one expert thinks that is not the case.
“Intermediaries can be a help in every aspect of the business,” Ali Safavi, founder of Plug and Play, an insurtech accelerator based in Silicon Valley in California, tells Insurance Business.
“A big focus has been around digitalizing the brokers and streamlining the process all the way from the carrier side to the policy-holder,” he adds.
According to Safavi, many startups are looking at intermediaries to understand the perspective of customer acquisition and experience, ranging from customer intelligence firms to distribution partners.
“In general, many of the entrepreneurs who were trying to disrupt the space have shifted towards enabling the intermediaries,” he said.
When startups are mentioned, the word “disruption” most often follows. Disruption is often represented as a harsh shakeup of the market, but it also provides opportunities for incumbents and startups to work together.
“The majority of the insurance companies are new in engaging with startups,” says Safavi. “We have seen how over time the expectations are becoming a lot more realistic with more tangible results. There is also an interesting shift from looking for only disrupting businesses especially on personal lines, to a bigger focus on technologies that can improve the processes and reduce back office cost.”
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