We have been seeing increased interest in and utilization of “InsurTech” – a large set of development programs and implementation methods to increase quality and quantity, streamline processes, enhance value, or otherwise improve on the business of insurance. All told, InsurTech is driving new methods to improve insurers’ and brokers’ technologies and to utilize new, technology-driven methods to make insurance more efficient and more cost-efficient.
However, there is a question emerging: will InsurTech continue to be a major driver for new programs?
It’s a big project …
This summer, Alicja Gradkowska discussed how “InsurTech growth in Canada opens up opportunities for insurers and brokers” for Insurance Business Canada.
Among the InsurTech tools are ‘hackathons,’ which focus on bringing together a wide mixture of employees, programmers, managers, experts and support groups to test new approaches, innovate techniques, and define new data sets and tools over a short period to generate results and guidance that can ultimately be applied to operations.
The hackathon in this case – titled ‘Hack It’ – was organized by Ontario Innovation Centre and featured Jones & Associates Insurance and Gore Mutual.
Sachin Rustagi, Gore Mutual’s director of digital, has seen an increased number of InsurTechs, which is helping carriers, implementing new tools and building new approaches. By bringing together insurers, brokers, and others, Rustagi says: “As a company, we recognize that innovation in our industry and the InsurTech domain as a whole rely on building and participating in the larger tech and innovation ecosystem.”
Hackathons are intended to engage professionals to introduce new tools, approaches and applications. Rustagi notes:
“Insurers, brokers, and industry technology platforms still have a big opportunity around the delivery of standardized connectivity methods, such as API technology. This isn’t an overnight initiative, but it has the power to create faster service, wider transparency, and cleaner workflows across multiple points in the customer lifecycle.”
The future is just around the corner
P&C Insurance in North America has a long and excellent history for consistent service. One issue: before the first development of InsurTech – circa 2010 – tech tool sets were considered important, but not really ‘strategic.’ New tools exploring artificial intelligence (AI) were relegated to back-office test services.
However, for the last nine years, Canada and the US have increased use of expert tools and AI to improve service, reduce response time, increase specific value points, and enhance individual personal support.
This is not as easy as it looks. AI tools continue to ratchet the available data to improve applications and data. In order to improve the results, insurers have to find more data for elements that have not been measured consistently.
And money is a critical factor. For example, Nationwide has a large venture capital group. They are planning to spend $100 million (USD) on investments and partnerships with start-ups; this has seen an ‘immense’ amount of progress, according to Brad Barnett, vice president of emerging businesses marketing.
Today’s version of big and engaged operations will not still be best next year, next month, or even next week. In other words, InsurTech is always working for the future.
In case you haven’t noticed, there is never enough data for InsurTech. If we are not accruing future data, we are lost already.
Is this impossible or what?
InsurTech users are implementing strategic tools which can keep information within the insurer – at least for a time. But this also prevents other insurers from accessing the information. Fortunately, wise insurers understand that sharing information is required.
To this, Nationwide’s Barnett says:
“In the start-up space, we look at one aspect as investment, but the thing that we’re going for mostly is partnerships – we want to find their secret sauce, plug them into the parts of Nationwide where it makes sense and leverage their capabilities – and hopefully, that makes a return over time.”
This is very much a work in process …
To answer the question at the beginning of this note, yes InsurTech continues to focus on processes, products, and data. That said, tomorrow might be introduced to new, better tools and data sets.
So, are you starting, or in the middle of, AI applications? Are you comfortable with ever-changing applications and data? Is a partnership the right idea?
I’d be very interested in your thoughts.