| | October 20219Insurtech refers to the use of technological innovation that is designed to streamline and modernise the insurance industrythem to generate new product sales, near-time actuarial analysis and methods of investigating risks. - IoT AND 5G: Similarly, the volumes of data relevant to insurance policies and claims will expand through the proliferation of IoT-connected devices. The launch of BT's 5G network will act as the framework that can underpin the expansion of IoT by increasing connectivity and solving the main challenges previously faced by IoT; namely speed, latency, and costs. For insurance, a network of hyper-connectivity that provides information around human behaviours, the performance of connected devices and environmental risks is potentially a huge development.- DLT: There is demand for DLT to form an essential pillar within insurance's infrastructure by creating an authoritative record of transactions. While insurance has typically been slower in adopting DLT-based solutions when compared to other parts of financial services, one of the defining moments of the last 12 months was the delivery of the first blockchain transaction by Willis Towers Watson and its partners. Expect to see more collaborative efforts, further PoCs and even some DLT-based products that will be finalised in the next year.- APIs: After decades of using legacy technology, firms are also looking to create synthetic middle layers where the middle layers create APIs. This synthetic layer of APIs will allow firms to simulate a modern world out of old legacy ones by opening access to the back-end systems while simultaneously embracing new technology because they create a platform to integrate insurtechs, new partners, and new technology engagement points. In doing so, firms can extract data, provide real time analysis to customers and keep up with ever changing regulatory demands. Firms can then silo off or transform the legacy systems and speed up the process of digitisation.- Cloud: Insurers are now properly analysing their data centre estates to better understand the possibilities presented by cloud technology. Through increasing cloud usage, we will see more economies of scale. Momentum has also been building from a regulatory perspective: firms now need to adapt to updated guidance from the FCA on cloud usage and the impact of related reputational risk. Increasing customer engagement in insurance will require a multi-layered strategy that considers a combination of cloud, Big Data and AI, along with APIs and their ability to enable digital change. In the wider industry, banks and fintechs have seen this kind of change already. However, while fintech was developed to cause disruption, insurtechs are evolving to increase collaboration between agile start-ups and traditional companies. To maximise the potential of these technologies and a new, customer-facing insurance industry, we are likely to see ever more collaboration within insurance in future.
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