Insurance is slowly changing and the change is certainly for good. The conventional and incumbent insurance model that we are witnessing currently will mostly be non existent in the near future. The transformative disruption of the insurance industry is the one where it moves from product centric to customer centric and a new business model which is supported by advanced technologies. Digital transformation of the industry is changing not only the way customers perceive and interact with insurers but is changing the way the industry works on the whole.Process simplification and replacements are happening with digital technologies like big data, artificial intelligence, automation, cloud computing and others.
Players of the digital insurance ecosystem
Insuretechs – The disruptors
The tech enabled digital insurance companies like Ladder, Trov, Fabric life, Sureify labs and others are redefining the insurance industry by providing better user experience, creating new insurance products and offering quick quotations. The products of these companies are comparatively unique and have short term, micro insurance and other insurance products that attract the present day millenials.
For instance, Ladder life truly shines in its unique ability to provide quick quote and offer instant coverage in 5 minutes whereas the industry average is closer to 6 weeks. Trov offers on demand insurance for the products that you love, depending on the need and entirely through phone. Fabric life aims at providing 20-year term life insurance that covers almost all forms of mortality, including accidental and illness-related death.
Traditional insurers and reinsurers – The adoptors
Traditional insurance companies are taking several initiatives and trying to become more digital, enhance user experience, redefine back office and front office processes, provide accelerated underwriting and instantaneous coverage etc with the use of digital technologies. Traditional insurers are developing in house capabilities or collaborating with startups and research organizations to become digital insurers.
Newyork life insurance, Metlife insurance and other major insurance players use Captricity’s AI solution for exception handling, data validation etc.State Farm, Progressive, and Allstate all utilize IoT telematics programs that allow users to install telematics devices in their cars for discounts. Fukoku mutual life insurance uses IBM watson for its payout calculation and it also incorporates incorporates Shift technology’s fraud detection solution.Lucep has partnered with Metlife to pilot their solutions in omnichannel customer engagement.
Hannover Re has partnered with companies like Ladder life and Sureify for accelerated underwriting using their Reflex platform. Munich Re is building a new digital factory that taps into the trends occurring across industries (Industry 4.0 for example) and in managing risks in different ways. Munich Re has also collaborated with companies like Starmind and Fraugster for enterprise knowledge base management and fraud detection respectively.
The insurance and reinsurance companies have launched accelerator programs and startup competitions to accelerate their digital transformation as well.
Digital startups – Enablers and aggregators
Companies and research organizations with expertise in artificial intelligence, big data, IoT, advanced sensor technologies and so on are supporting insurance companies directly or indirectly in making them more digitally strong. Different companies are helping in risk assessment and underwriting, claims, customer engagement, product development, marketing and so on.
Good data and Imprezzio are providing lead generation for the insurance sector.Startup Mnubo, with an aim to help companies monetize their data is funded $16.5M by MunichRe’s HSBventures. Cytora and captricity are few of the companies providing AI based technologies for data validation. Life Drip offers digital marketing for life insurance products. DreamQuark, NG data and other companies use AI based advanced analytics to improve customer experience and in customer retention. Kryon systems, Omnius, Pega, galaxy AI and other companies are using AI to create a better experience of claims processing for customers.
With the combined effort of the digital ecosystem players, the insurance industry is likely to undergo a huge transformation in the near future. Life insurance companies in USA have seen a drastic reduction in their number in the last few years. Digital technology implementation will not only help the existing customers but will help insurance industry attract more customers, especially the millenials who are the future customers of the insurance industry.