Why is insurtech important?
Plain and simple: Insurtech improves the customer experience. In the past, insured parties had to deal with salespeople driven by earning commission, not getting individuals what’s best for them. There was also a large volume of paperwork, and the entire process could take weeks, or even months. That’s all changing thanks to insurtech – insurance and other financial services are becoming more accessible.
Policyholders can now research options and even purchase insurance online. Through the internet and apps, individuals can compare and find what works best for them. No need for mountains of forms, insurance professionals or setting foot into a physical business.
Additionally, rating factors are becoming more about the person and less about the money. Thanks to things like the IoT, AI and machine learning, companies can better segment policyholders based on their actual driving habits, rather than more generally. That can also mean lower premiums, or at least ones that more accurately reflect you as an individual. This is true in home insurance and life insurance as well.
Finally, insurance is cheaper, both for insurers and policyholders. That’s typically true of traditional insurance, but we’ll expect to see more “short-term” insurance models, too. For example, coverage for a two-day weekend trip to a city three hours away should cost less than a monthlong excursion into an Australian volcano. Likewise, if you don’t have insurance and just need to borrow a friend’s car to pick something up, it wouldn’t make sense to invest in a six-month plan; you’d only need something like an hour or two of coverage. Insurtech is improving the flexibility of a traditionally monolithic industry.