Entrepreneurs share their views on current industry trends and future opportunities
By Howard James
Innovation in insurance is leading to the development of more granular and flexible polices, which are becoming increasingly embedded in the lives of customers.
While other industry segments are fearful of the disruption brought about by new technology, InsurTechs are more focused on enabling the insurance value chain, rather than disrupting it.
Four InsurTech entrepreneurs share their views on developments to date, and how they see the industry progressing over the next year and beyond.
Alex Schmelkin, Chief Revenue and Marketing Officer, Unqork
Customer experience remains underwhelming in the insurance industry, according to Schmelkin, despite efforts to bring it in line with today’s digital and omnichannel environment. More than one-third of insurance customers don’t trust their carrier, and almost two-thirds of these customers would consider using a non-traditional insurer. Furthermore, the industry remains heavily reliant on personal relationships, with more than 90% of US customers still using agents to purchase policies.
All is not lost, however. For insurers to wholeheartedly embrace digitisation, they can start by using tried and tested tools, such as social media and chat apps. Partnering with InsurTechs enables carriers to capitalise the latest technology without allocating research and development resources to projects. Blaming legacy systems for the industry’s lack of digital advancement is simply an excuse to keep the status quo, Schmelkin says.
Rohan Kumar, Chief Executive Officer and Co-founder, Toffee Insurance
For the insurance industry to advance, it needs to modernise three areas, says Kumar. First, it must deconstruct products by taking away their complexity, as well as the jargon used to explain policies. Carriers must introduce products that suit specific customer needs. For example, Toffee Insurance provides dengue fever coverage in India, which is a fraction of the price for general health coverage (Dengue is a common illnesses within the country).
Second, buying insurance and the claiming of policies takes too long to process. By approving purchases in real-time, and paying out claims within 24 hours, for instance, insurers will bring themselves in line with other lifestyle services. And last, context. Kumar points out that by selling dengue insurance in clinics and pharmacies, for example, insurers are targeting customers in the right place and at the right time. Use of technology, which already exists, will be key to realising these three trends, says Kumar.
Teo Peiru, Chief Executive Officer, KeyReply Pte Ltd
A common pain-point experienced by insurers is the continued lack engagement they have with customers. Firms ordinarily interact with policy holders a few times a year, at most, and data held on customers is mostly disparate and unstructured, Teo explains. This is hampering the ability of firms to fully leverage big data and AI, and provide a holistic view of customers, and appropriately offer relevant products.
Advancements in data science, however, are beginning to alleviate the impasse. They are enabling firms to connect disparate information and create more in-depth customer profiles. This will help insurers improve customer acquisition and retention, which to date, says Teo, have been far from exemplary.
Dr Tom Ludescher, CEO Asia and EMEA, Entsia International
Unlike their FinTech relatives in the payments space, for instance, InsurTech needs ecosystems that involve all actors in the value chain, says Ludescher. There is space for everybody: underwriters, brokers, InsurTechs, regulators and many more. Given their potential as distributors, tech players, such as Apple and Alibaba, should also have a seat at the table.
Key to bringing everyone together are open platforms, where InsurTechs can provide more traditional actors with APIs that are able to execute specific tasks faster and cheaper than conventional tools. Collaboration will be key to the advancement of the insurance industry over the next decade and beyond, asserts Ludescher.