The convergence of InsurTech and traditional insurance technology
Will InsurTech be disruptive? Will there be an Uber of insurance? Will we even recognize the industry 10 years out?
These are some of the questions people are asking today. No one knows for sure, but most participants recognize there will be substantial transformation of the industry. SMA research reveals an increasing percentage of insurers (about half) claim they are working on transforming their companies.
What will this transformation look like? What will be the role of InsurTech companies? And perhaps most importantly, how will insurers integrate innovations, partnerships, and technologies into their existing digital infrastructure?
InsurTech and MatureTech
There seems to be a consensus forming that InsurTech will converge with traditional insurance. Even now, most of the startups are partnering with or selling to insurers, which means that they need to integrate their tech-based solutions with the systems, data, and workflows that exist today inside insurance companies.
The InsurTech firms may be digital agents/brokers, new players in the claims ecosystem, contributors to smart home or connected car solutions, or digital data/analytics providers. They may offer a new breed of solutions to increase operational efficiencies or improve the customer experience. But whatever the specific focus of the InsurTech company, very few are able to operate standalone.
In essence, this means that InsurTech and MatureTech need to work together to enable industry transformation.
A few examples help to illustrate the types of opportunities available and the related integrations required between existing and new technologies:
- Digital distribution
The biggest percentage of InsurTech companies are seeking to disrupt or change insurance distribution, either as digital agents/brokers, new MGAs, or digital tech platforms for distribution. These new and emerging players will need to integrate with the insurers that are underwriting the insurance and servicing the policies.
This means transactions and information must flow between all the systems, data, and insurance professionals that are involved in the core areas of the insurance business.
- Connected life/health
New products and services based on wearables and mobile health/wellness solutions are essential to the future of life and health insurance (as well as workers’ comp). The vast amounts of information collected in real time about an individual’s health and fitness-related activities must be fed into internal insurer systems for management, analysis, and action.
- Emerging tech in claims
Drones, augmented reality, artificial intelligence, and other technologies are already being applied to claims processing to improve operational efficiencies. InsurTech companies providing these capabilities and others (such as self-reporting of claims based on streaming video) are starting up regularly. The new capabilities and new data generated by these companies are fed into the insurer’s existing claim systems with new and improved workflows resulting.
These are just a few examples, but virtually every new emerging technology and InsurTech opportunity will eventually work in concert with existing insurers and their systems. New workflows will evolve that insurers must integrate with the existing workflow software already in use today.
The demand for a modern digital platform
Success in the future will increasingly be dependent upon smart partnerships with InsurTech companies. A modern digital platform will be vital in order to pilot and integrate the new capabilities from these InsurTech partners.
Having a modern digital insurance platform means that the insurer must have the technology solutions to capture, route, manage, create, deliver, and analyze digital content, including both structured and unstructured data. In addition, it is critical that insurers have a tech platform that enables rapid definition or redefinition of processes and workflows, so automated systems can accommodate new digital capabilities and employees can adapt their normal work patterns for the enhanced capabilities.
At the heart of those technology capabilities are enterprise content management systems that support the mobile, digital world of today. These important solutions have the flexibility to support the convergence of InsurTech and MatureTech over time, and integrate systems to allow insurers to find the important information they need, when they need it.