The insurtech industry has continued to grow ever since it evolved in 2010. Just last year, this industry broke its record with funding commitments of approximately $6.37 billion from companies around the globe, according to the data revealed by Willis Towers Watson. This figure equaled almost 40 % of the total investments ever made in the insurtech industry since it emerged.
Looking at these figures, the future of the insurtech industry is bright with strong growth anticipated.
Before we get to the details, let’s first look at what is insurtech and how it works.
What is Insurtech?
Insurtech is any technical advancement incorporated within the insurance industry to reduce insurer’s cost and improve their operations and bottom line. It is a branch of fintech, which is the use of the latest technologies in the financial services industry. In simpler terms, if you’ve ever replied to a chatbot on an insurance company’s website or smartphone application, you’ve interacted with insurtech.
The Future of Insurtech
If the coronavirus pandemic has taught anything to businesses, it is that they can offer almost any service and sell almost everything digitally—and that also includes insurance transactions to the customers.
Despite the evolution, insurance company carriers and brokers struggle to fulfill their clients’ expectations on digital platforms. The insurtech industry will continue to digitalize and innovate with new technological advancements. In fact, as per the 2020 Insurtech Global Outlook report released by NTT Data, insurtech investments are expected to double by 2023!
Incumbent insurance agents and brokers who are unwilling to embrace the change will be left behind with their traditional infrastructures.
Increased Customer-Centricity with Full Automated Platforms
Insurance companies can devise better customer-centric strategies and offerings with the help of insurtech. Receiving payments for insurance services on digital platforms may be challenging for the incumbents who have not fully automated their platforms. Biometric security—another example of insurtech—enables insurance companies to simplify their micropayment systems to boost their consumer experience. It has made online transactions secure and more comfortable for millions of insurance consumers who can now make payments with one tap on their wearable tech, smartphone, or other handheld devices. Insurance companies who have not already adapted to biometric security, and want to grow their business, would be wise to embrace this new technology in order to be competitive. More manageable online payments, especially for insurance services, means more loyal, satisfied, and happier customers.
Insurtech is going to revolutionize the insurance service sector. But our analysis suggests one thing; that insurers need to modify their fundamental strategic models to shift from siloed processes to interconnected ecosystems. We are not talking about bringing change in just one department but on an organizational level. This will require companies to move their focus from the products to improve the customer experience online.
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