Insurtech's impact on the insurance industry
Over $7 Billion was invested in Insurtechs in 2020, over triple that of 3 years prior. 87% of insurers agree that technology is advancing exponentially. Here's a sampling of what we're already seeing. There are lots of resources at the bottom of this post to learn more about this topic.
Automated Underwriting
In some cases, automation is used to support underwriters and allow them to expedite the underwriting process. In these cases, some or all of the time-consuming tasks, like obtaining loss information from prior carriers, reviewing motor vehicle records, and searching the internet for inconsistencies in the application, are handled by a machine, and critical thinking and decision making is handled by the underwriter.
In other cases, the underwriter is removed and the machine is the one making all of the decisions. An underwriter is still involved, but to the extent that they are working with the data scientists to build the box that guides the decision making. These Insurtech companies don't need dozens of good underwriters, they need very few, but exceptionally good underwriters.
An example of this is Hippo Insurance, where you can get a homeowners quote in 60 seconds. Consumers want simplicity, especially when it comes to insurance, and that's what automated underwriting provides. Hippo has a 4.9-star average rating. Check it out.
Automated Claims & Underwriting
Traditional insurance companies have been reluctant to embrace automation in their claims departments to date, with only a quarter of insurance companies even considering incorporating this type of technology. That being said, disruptive technology already exists and it's only getting better and cheaper.
Take Lemonade, for example. It's a 100% digital insurance company. It automates both its underwriting and claims functions, and like Hippo, has a 4.9-star average rating. It holds the world record for the fastest claim settlement, at 3 seconds. 30% of its claims are approved instantly.
This company does more than just use innovative technology to simplify Home Owners, Renters, Pet, and Life insurance, it has an innovative and socially conscious business model as well. Lemonade charges a flat fee for handling claims and pays the rest (up to 40%) to policyholder selected charities. Lemonade understands the social good insurance can provide and shares the financial benefit of technology and automation with society.
Check out the Secret Behind Lemonade's Claims and peruse their website to learn more about Lemonade
Insurance Coverage in two minutes
At Inshur, you can get TLC Insurance in 2 minutes. Check out the video. It's pretty amazing.
Chatbots explained
Chatbots use Natural Language Processing (NLP) to communicate with customers. These are becoming increasingly relied on when it comes to customer service. In the near future, the majority of client service interactions, across all industries, will be conducted via a chatbot.
Check out the 2 minute overview, What is a chatbot and how does it work?
Insurtech funding hits $7.1 billion in 2020, a record high
“While our industry is facing extreme issues relating to COVID-19, we also have an unprecedented level of access to technology and technologists who can help it prevail during these times of instability,” said Dr Andrew Johnston, global head of insurtech at Willis Re. “Many insurtechs probably feel vindicated that the insurance industry has been forced to realize the value of technology. The issue for insurtechs now is to survive months, possibly years, of market uncertainty.”
Additional resources
Here are some additional resources that may be helpful
Automating Insurance Claim Processing in the Digital Era
Plug and Play article by Natalia Markovskaia
In the past, insurance companies’ digital transformation has been slow. Now, many insurtech startups have been launched to fill the need for innovative technologies in the industry. One of the fields that urgently needed digitization was claim processing.