Key InsurTech Trends to Keep an Eye on
What is InsureTech?
InsurTech refers to the use of technology to innovate products and solutions to further enhance the operational efficiency and business model in the insurance industry, which involves internal business processes, product, distribution management and more, with the aim of optimizing customer experience for policyholders. Adopted in new trends such as online insurance and remote insurance, InsurTech has emerged as a disruption in the insurance industry in recent years, which has been brought to people’s attention and prompted changes in laws and regulations in response to the new wave.
Key InsureTech Trends for 2022
The InsurTech market is expected to thrive; according to Forrester’s Q3 2021 report, InsurTech funding has reached a record high of $15 billion as of the third quarter of 2021, which has even surpassed the sum of 2019 and 2020. Moreover, the latest report released by the IT service company Capgemini has pointed out that an investment of $255 billion (£187 billion) in end-user technology and IT services is expected from the global insurance market by 2022, which suggests a significant growth of InsurTech demands.
Insurers have been engaged in digital transformation over the years despite numerous challenges to overcome, especially under the impact of COVID-19 pandemic. To respond to the ever-changing market and demands, the importance of digital technology can’t be overemphasized. Let’s move on to look at the top InsureTech trends to watch out:
- InsureTech solutions are taking the lead
As InsurTech is becoming a new norm, SaaS and PaaS solutions, featuring high flexibility and maturity, can quickly solve the pain points of digitalization for traditional insurers. In addition, the API interconnectivity empowers insurers to innovate applications to meet the diverse needs of the insurance industry and to provide consumers with a variety of services.
- Customer-centric personalized experience
Fast, seamless and effective user experience is the top priority in this digital age. To respond to the new trends such as insurance fragmentation and segmentation, InsurTech has enabled smart, automated, contactless insurance and claim process by implementing big data, cloud technology and artificial intelligence, which successfully caters to the trend of personalization and is able to offer the products in high demand with the best customer experience.
- Deeper connections with consumers’ wellbeing
A survey on the US life insurance market conducted by Deloitte indicates that for the uninsured, the purchase intention of insurance will increase if the insurers can tailor premiums according to the lifestyle and diet, which requires technology, such as health and fitness apps and wearable devices, for data collection for the insurers’ review and underwriting. Therefore, with the adoption of cloud technology, AI, big data, IoT and more, InsurTech makes the insurance industry inseparable from health and wellbeing.
- An API-driven ecosystem will be on the rise
Driven by the prosperous digital economy, businesses are actively building new platforms or services. The development of API has shortened development time of applications, and further ensured an efficient collaboration with the partners and facilitated the ecosystem. This trend can be seen in Europe already, and will be in full swing in 2022.
InsurTech Outlook 2022
The insurance industry is still facing various challenges due to the economic impact of the pandemic for the past two years; nevertheless, consumers are getting more and more aware of the importance of insurance. According to the world insurance forecast of the Swiss Re Institute, the global insurance demand will grow by an above-trend 3.9% in 2022.
In the article “2022 outlook: Setting a course for the coming decade“, McKinsey provides insights into the InsurTech trends: In 2020, 44% of consumers showed interest in buying insurance from tech companies, which is a substantial increase from 7% in 2016. While traditional insurers are being disrupted by the InsurTech companies entering the market, they still benefit from their advantageous position in the ecosystem through clear digital transformation strategies to achieve business growth.
An uncertain economic environment may continue, and insurers need to quickly take responsive actions to stay competitive and provide optimal insurance services. Consumers are looking for new forms of insurance fueled by InsurTech solutions. To learn more about how we can help you achieve the best results, please reach out to us.