The insurance world is now changing new ways of doing business leaving their mark on the industry. All you have to do is look at the dramatic revision plan of Lloyd & # 39; s of London – whose goal is to become & # 39; the most advanced marketplace in the world & # 39; using technology-supported initiatives such as an electronic risk exchange – to recognize the shifts that are currently taking place.
Accordingly, investments in insurance technology space continue to grow and fluctuate at US $ 140 million in 2011 and by 2018, rocketing to US $ 4.9 billion. The Impact InsurTech QBE North America and Village Capital's report currently identified three themes that dominate insurtech: insurance for everyone, shaping society for insurance, and micro transformations that affect macro risk. The report also noted that innovations such as process automation, AI and blockchain make insurance processes more efficient, thereby improving both the affordability and accessibility of insurance policies.
Read more: QBE publishes report on growing insurtech space
Although there are many solutions to unpack in this growing field, some experts see certain technologies rising to the top.
“There are probably two large buckets where we see a fairly universal application in insurance value chains. I think it's about analytics, AI and machine learning, and where and how they apply to the value chain, "said Jim Bramblet, Accenture's insurance practice in North America.
Matt Lehman, head of P&C in North America, added that many insurance companies have expanded their datasets with social media and satellite images, while most companies relied on relatively limited data sources just a few years ago.
"Now they have those up to five, 10, 15, 20 different data sources that they put into the product," he said.
The second "bucket" of useful innovation that Bramblet mentioned is the potential of distributed ledger technology, which he believes is gaining momentum throughout the industry.
“That technology and that platform offer much more transparency about risks in all parts of the P&C sector, so personal lines, vehicles and houses, but also supply chains, goods in transit and fundamental risks that become more transparent, & he said. “Much of it can be pushed onto the platform, and insurance companies can subscribe to and do much more with that data than in the past. Now it is still on the rise, but certainly something we pay close attention to. "
Notable progress in the field of blockchain in recent years included Marsh rolling out a proof of blockchain insurance program for commercial customers, London-based bank Standard Chartered and insurer American International Group (AIG) who completed a blockchain pilot intended to simplify complicated insurance policies, and the approval of Insurwave, a blockchain platform to support ship hull insurance, by the maritime industry.
Nevertheless, there have been roadblocks in the wide acceptance of blockchain technology in insurance.
"Our customers are all competing, and we see this with distributed ledger technology – we're starting to talk about the fact that the only way that works is if it's a team sport and I think every courier trying to explore that path themselves has a bit of a challenge , & # 39; said Bramblet. "Their competitors will say:" Well, what is the purpose here? Why should I subscribe to your platform? How is money earned from this? "And all concerns about data and risks play a role, so I think this is where we will see consortia a much bigger role and we are beginning to see that happen on a large scale."
Another problem with broader navigation through the insurtech landscape is that the huge number of companies, their possibilities and the unique added value they have can be overwhelming. This causes problems for the speed of acceptance with traditional insurers.
"How do you really understand the problems you are trying to solve and how do you sort out different sets of solutions to solve those problems without getting a lot of complexity?", Lehman said. “There are pluses and minuses, but you could have a scenario where today it might be a single technology or platform that solves a problem, but in the world of tomorrow it can be a few, so how do you use that in a efficient and effective way? "
Yet the most common question that insurance customers have for the Accenture insurance team is how to understand the solutions that insurtech companies put forward and know how to distinguish between company A versus company B versus company C to determine which they want a large gamble, Lehman explained.
"But part of it has just begun," he said. "You will learn much more through experience than through analysis."