Gallagher said the idea that insurtech – technologies such as blockchain, artificial intelligence (AI), and the internet of things (IoT) – signals the end of client-broker relationships is “over-simplifying the scope of insurtech in the insurance industry”, and cites ways by which these digital tools can benefit insurers, customers, and other stakeholders. These include:
Automated services. Digital broking platforms enable users to shop around for insurance policies, as well as manage, renew, compare premiums, and lodge claims online. Some even allow small businesses to check their suppliers’ cover.
On-demand insurance. With a simple swipe of their smartphone, customers can activate or deactivate short-term or on-demand policies for limited periods or cover for specific items, using an app as a portal.
Peer-to-peer insurance. Customers are given the option to pool their money with friends for lower premiums (based on the supposed lower chances of fraudulent claims through leveraging the trust factor), who get part of their premium back at the end of a claim-free year or have it donated to a customer-nominated charity.
Chatbots. These AI-powered customer service representatives not only provide relevant information to online inquiries, they can also capture as much as 350% more leads and 35% more conversions for the companies that are using them.
IoT This technology enables smart items to monitor their own functionality and alert owners of potential issues and dangers before they happen, which helps in reducing costs for everyone involved.
Blockchain. This network-shared, decentralised and tamper-proof public ledger enables multiple parties to transact securely online.
Big data analytics. Beyond telematics, data-analysis reporting enables insurers to accurately calculate risks and create tailored programs for difficult-to-place clients.
New business models. Insurtech capabilities can be harnessed to enhance insurance offerings, improve efficiency, and cut costs by automating parts of the insurers' operations that are time consuming and that provide no direct value to customers. This way, insurtech can help them focus more on core business and provides them with insights on how to offer customers more personalised and relevant service.
“Fintech start-ups themselves present complex risk profiles that require broker expertise and specialised knowledge to create programs that meet their insurance needs,” Gallagher said in the blog post.
Gallagher is one of a number of corporate partners of Insurtech Australia, the local insurtech body that recently joined with InsTech London, InsurTech Asia Association, and FinTechNZ to form the Global InsurTech Alliance (GITA).
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