| | October 2021 8OPINIONIN MYThe concept of fintech is hardly new. The amount invested into fintech ventures globally ballooned to US$55.3 billion, demonstrating that financial technology is central in enabling innovation within financial services. Despite this monumental progress, fewer people know about the significant sub-branch of fintech known as `insurance technology' or `insurtech' in detail, even though global insurtech investment surpassed $3bn. In short, insurtech refers to the use of technological innovation that is designed to streamline and modernise the insurance industry. And, just as fintech is disrupting traditional banking models, insurtech is on a path to reinvent insurance by re-imagining the ways in which insurers analyse risk and engage with their customers. However, modernising this industry through technology poses its own unique set of challenges, largely because insurance consumers generally prefer to avoid their providers. After all, once somebody has purchased travel insurance, they're unlikely to want to speak to their insurer again unless they need to make a claim. With this challenge in mind, CIOs need to ensure they manage innovation through the most dynamic technologies in order to develop positive, cost-effective consumer relationships that ensure they are digital by design. Insurtech could affect substantial changes for both the insurers and the insured, but to achieve this, it is essential that efforts are focussed on the right technologies. To this end, we have outlined seven key insurtech trends to consider for those planning a start-up investment or innovating within an established insurer:- AI: AI is now being widely deployed across insurance for chatbots and other forms of online communications, as well as within claims analysis. Chatbots will grow increasingly significant as insurers Insurtech as a subsector of Fintechrealise the benefits they provide. For example, these bots can top and tail their customer interactions with a human agent to speed up the processing of claims, collecting essential information and then closing a call. The best of these will quickly link a customer to an advisor with skills that are most likely to meet a customer's needs, thus freeing agents from managing routine queries so that they can focus on for more complex or valuable activities.- Big Data: The convergence of AI and Big Data will be key, as AI will enable insurance firms to add structure to the huge volumes of data available. Used responsibly, Big Data enables firms to develop significant insights into their insurance markets, allowing Alexandra FosterBy Alexandra Foster, Director Insurance, Wealth Management & Financial Services, BT [LSE: BT.A]
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