The insurtech sector has grown rapidly in recent years, with a number of startups launching new products and making it easier for consumers to buy insurance. Many of these are products of startup accelerators. The most successful insurtech players, according to TechWorld, appear to be those who focus on building new products to address the changing needs of the customer.
Insurance-as-a-service
The traditional model of an insurance company offering a standardized product to the customer is on its way out. Many customers, especially millennials, want more choice and a flexible approach to insurance products.
This flexibility to decide what to insure (“insurance as a service”) is being met by several insurtechs, who are offering insurance products tailored to the customer. An example is the company Valoo, which offers a straightforward way for customers to make an inventory of possessions. This is achieved through the processing of photographs. These captured items can then be valued by artificial intelligence scanning the items, and then short-term insurance being offered.
Blockchain
InsurTech startups are deploying blockchain technology to disrupt the insurance industry. One important application is using the technology to allow insurers and customers to verify the location of goods around the world in real-terms. This has helped to facilitate peer-to-peer operations in financial services.
An example of this service comes from Dynamis, which uses Ethereum, to offer peer-to-peer unemployment insurance, in the form of supplemental unemployment insurance. According to Foresight Factory, Dynamis pays premiums into a de-centralised contract, setting up individual accounts for all its employees. If there are no claims, the premiums gradually go down. For employees, the account allows them to use the money while seeking employment and to transfer the details to their new workplace.
Big data analytics
Big data encompasses the massive amount of stored information on anybody who has ever had a digital connection — and this data is of value to insurance companies. The startup Cystellar operates a cloud-based big data analytics platform. The aim is to offer insurance firms data-driven decision making. Cystellar’s platform uses predictive analytics for insurtech firms. The main focus is trying to predict and thereby avoid damaging events, such as natural disasters that might affect agtech and foodtech companies.
Claims reduction
With traditional insurance people pay in the same money (which often goes up) whether a claim or made or not. This model is challenged, for bicycle insurance, by the startup Laka. The company operates a community-based model for bicycle insurance. The monthly maximum is fixed at around £18. However, this reduces depending on how many claims are filed by the wider community.
Security-as-a-service
Cyberattacks are a feature of modern life. To help drive down insurance costs, many companies are keen to know how they can improve their systems are services. An example startup in this space is ThreatInformer. The company provides cyber risk intelligence to the insurance industry. The firm creates tools for users to transform the way risks are written, using a security-as-a-service platform. The aim is to use productive analysis of security assessments and environmental factors to enable business users see the full risk picture.
In related news, Digital Journal has profiled three of the big changes altering the insurance space, where insurtechs are the main players, for 2019.
