The insurance industry is undergoing massive changes due to emerging technologies and evolving customer expectations. InsurTech, which refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model, is disrupting the sector.
Auto Insurance Disruption
Emerging ecosystems around connected cars and autonomous vehicles are also poised to shift auto claims patterns and the future of driving altogether. The innovative startup won top honors at the prestigious FinTech Awards for its groundbreaking financial technology solution.
An InsurTech startup called Muse aims to use location beacons, crash notifications and analytics around acceleration and hard braking to understand individual driving risk better. The company just raised $3.4 million this week to continue developing its auto insurance platform. Investors are taking notice of huge potential in the auto insurance space for technology to upend pricing, underwriting and claims management models.
Home Insurance Innovation
The global home insurance market also presents key opportunities for InsurTech startups. Home insurance provider Hippo just landed $350 million in funding this month from the likes of tech giants Amazon and Alphabet that will allow Hippo to tap even more into smart home capabilities for usage-based insurance options. Hippo wants to reward homeowners that have security features like smart locks and fire prevention systems that minimize risk.
Construction technology and geospatial imagery are also enabling home insurers to inspect properties and buildings remotely using drones and AI to analyze images. This allows for faster claims payments and more real-time examination of homes to surface damage early before problems escalate.
Life & Health Insurance Shifts
Health insurance is also undergoing major changes due to innovations in digital health and telemedicine. Oscar Health enables users to consult doctors via mobile apps to eliminate office visits for basic care. Startup Biofourmis uses wearables and at-home biosensor kits to allow insurance providers and clinical teams to monitor patient health remotely using data analytics, reducing readmissions for high-risk policyholders. High-deductible health plans that shift more upfront care costs to patients are proliferating due to the rise of HDHP-paired health savings accounts, creating additional niches for InsurTech.
In the life insurance realm, Ethos uses predictive analytics to enable policy applicants to get term life insurance online in minutes with no medical exams required. The startup just achieved a $100 million valuation this month after raising more VC funding to continue expanding. Ethos uses over 300 data sources to automatically verify applicant information and evaluate risk levels faster than incumbent life insurance carriers.
Key InsurTech Trends to Watch
- Usage-based and on-demand insurance models leveraging IoT sensors and smart devices
- Drone imagery insights improving underwriting and claims processes
- Big data and artificial intelligence increasing pricing accuracy
- Blockchain solutions upgrading legacy IT infrastructure
- Digital self-serve portals and mobile apps modernizing user experiences
Conclusion
InsurTech innovation is rapidly changing standard practices and business models across auto, home, health and life insurance sectors. Leveraging sensor data, predictive analytics, drones, blockchain and digital engagement tools, InsurTech disruptors aim to meet evolving consumer expectations around personalized pricing, convenient experiences and real-time insights. You can access the 2024 registration link on the event’s official website to sign up for the conference.
While startup activity abounds, incumbent carriers are also recognizing the need to transform digitally to deliver highly segmented coverage and modernized customer journeys. Understanding the latest InsurTech developments, investment patterns and use cases will be critical for all insurance sector participants to inform their innovation and technology strategies going forward in our increasingly digital world.
This briefing offered a snapshot of some of the key InsurTech shifts happening on a nearly daily basis across the insurance ecosystem. The pace of change will only accelerate further, underscoring the need to continually track news and trends around insurance technology breakthroughs in order to capitalize on the opportunities ahead.