We all know that Mona Lisa has to be one of the most famous paintings of all time. But why is it so? Sure, Leonardo da Vinci is a very important reason, but that is not the only one. This is not known to many but the reason why this painting is famous and expensive is because of a major insurance fraud that a scammer staged. This scammer asked another artist to forge the Mona Lisa painting and 6 copies, while another thief stole the original painting. He then spread the news of the theft and sold all the 6 copies as the original. This financial fraud raised the price of the painting and today it is insured for almost $800 million. Major financial frauds and scams happen quite frequently and that is one of the reasons why technology intervened and brought in advancements. Insurtech is one such advancement under the industry of fintech. The operation and administration of the processes with the integration of technology resulted in insurtech.
The insurance industry witnessed a swift but strong wrench in the direction of insurtech. The approaches within the industry are changing and the ecosystem within which the companies operate has become customer-led. It is no surprise that now companies are now able to provide complex solutions disability insurance services online and with ease to the customers. One such company is Simple Disability Insurance that deploys technology and has specifically designed solutions to automate the insurance process. Companies like these are the reason why 96% of insurers believe that digital ecosystems are having an impact on the insurance industry (www.thinkjets.com). It is evident that insurtech is the next big thing, let’s dive into the Top 5 reasons why it is going to be even bigger.
1. Anonymity with Blockchain – One of the major loopholes in the insurance industry is the fact that it is not surreptitious. The identities of the insured are usually not a big secret and there are also cases where the insurers themselves work for the insurance companies that provide them with the services. This can be taken care of by blockchain technology. Blockchain is known for having decentralized network and security of the nodes, and its application in smart contracts can also be utilized for high-speed, low-cost transactions. For example- Lemonade that leverages smart contracts for insurance.
2. Monitoring of Risks with wearables and gadgets – Did you know that the watch that you wear that tracks your heartbeat and the miles of your run, or the calories that you burnt while exercising is now being used by insurers to monitor your activity and control the risk factor in your insurance. Allstate lets its users install a monitoring device in their vehicles and offers discounts to the safe drivers. It is beneficial for both insurers and the insured to optimally utilize the benefits of insurtech.
3. Analysis with AI and Analytics – Insurtech companies are now drawing imagery data from satellites and integrating that data with AI and Analytics to receive predictive analytics reports which they further use to monitor and avoid damage to the clients of their products in any form, for example, like in the agriculture industry there is insurance to protect against the loss of crops or livestock.
4. Easier processing with the integration of solutions – Everybody who has had insurance, knows about the strain of heavy paperwork and time consumed. But with the low hanging fruit of insurtech is the fact that solutions that have consumer data and information can be integrated with the consumer applications to altogether remove the hassle and make things easier for all the parties involved.
5. Cloud-based Solutions – The processing of the claims requires a great deal of data processing, which generally delays the process and causes friction. Cloud-based insurtech solutions allow insurers to scale their solutions at a greater speed and with more security. Strategically deploying cloud computing to secure and flexibly move data without it getting lost is another relief provided by insurtech.
It is no surprise that insurtech is a trending topic, not just in the fintech industry, but in the technology industry as a whole. Customers now lie at the heart of the services and solutions are built around them. Apart from these, insurtech is also leveraging technologies like Big Data and Cybersecurity solutions to change the legacy systems into smarter collaborative applications.