10 INSURTECH TRENDS AT THE INSURANCE CROSSROADS 2018

THE INSIGHT CONSULTING GROUP | December 13, 2017

article image
The insurance industry and technology are no strangers to each other. And yet the industry has not been considered a leader when it comes to the application of technology. That is until now. The emergence of InsurTech as an agent of change has reshaped the strategic agenda. For the final issue of InsurTech Insights for 2017, Rick Huckstep lists his top 10 InsurTech trends for the insurance industry. It was a little under three years ago when I wrote a blog entitled “where’s the insurance tech in Fintech?” It was my first article on the subject and the #InsurTech social media label wasn’t in the vernacular back then. This was early in 2015 and Fintech was essentially all about banking. Of course, there were some early movers in the insurance space, but it was nothing like it is now. Fast-forward to today and it’s a different story. Remarkably, in just a couple of years, the sleeping giant of insurance has been woken roughly from its slumber.

Spotlight

EFU General Insurance Ltd

Founded in 1932, EFU General is the oldest and the largest insurance company of Pakistan. EFU opened its doors for business with a vision to be the foremost in making financial futures of its customers secure. Eighty years down the road, that vision still remains foremost in all it does.

OTHER ARTICLES

The Impact of COVID-19 on Insurance Companies

Article | April 9, 2020

The speed at which COVID-19 is impacting the economy is unprecedented. Like many businesses, insurance companies are facing unique challenges in this rapidly evolving situation. How insurers approach and respond to these challenges will influence their resiliency and ultimately how they will fare. Insurance companies are facing new pressures as they are hit with multiple challenges—all at once.

Read More

6 reasons to take out landlord insurance

Article | March 9, 2020

Making the leap from homeowner to property investor comes with a unique set of challenges and opportunities. While many landlords try to minimize their outlay and maximize their return – and understandably so – insurance is the one essential expense you simply can’t afford to scrimp on. It’s so important that you are adequately covered with suitable landlord insurance, so that the following scenarios don’t cripple you financially…

Read More

Why Germany Is Becoming a Global Hotspot for InsurTech Firms

Article | February 25, 2020

For the uninitiated, insurance technology, or InsurTech, is the system of tools and technological innovations that are used to drive improved efficiency compared to older insurance industry models. In 2019, Germany had already begun to position itself as the de-facto hub for InsurTech firms, largely due to the uniquely collaborative nature of InsurTech startups in the country, in combination with extreme interest from international investment firms, which recognize the disruptive potential of many nascent German InsurTechs.

Read More

Will your insurance IT investments pay off?

Article | April 12, 2021

Automated claims processing, price comparison platforms, mobile bill paying—these are just some of the digital services that insurance customers expect and insurers want to provide. As the demand for digital skyrockets, so does the need for insurers to invest in IT. In the past seven years, the share of IT in total operating costs of property-and-casualty (P&C) insurers increased 22 percent. The rise of digital means technology is no longer a cost center. Rather, it is an asset that, if managed well, can increase growth and profitability. But do these IT investments pay off? As the COVID-19 pandemic exacerbates already increasing cost pressures, insurers’ IT budgets are under scrutiny; they want to see the business impact of their IT investments. Insurers with targeted IT investments achieve better growth and performance Data from McKinsey’s Insurance 360° benchmarking survey provide strong evidence of the positive business impact of targeted IT investments. In fact, insurers that invest more in technology outpace competitors that don’t pursue targeted investments in business measures such as gross written premium (GWP) growth, return to shareholders, and expense and loss ratio (exhibit). As an example, in life insurance, companies that invested more in IT saw a greater reduction in expense ratios (by 2.0 percentage points) and higher returns on technical reserves2 (1.7 percentage points) when compared with insurers with lower IT investments. Insurers achieved these outcomes within three to five years of making their investments. For P&C insurers, those with high IT investments achieved approximately twice the top-line GWP growth of low IT investors. High IT investments also produced a greater reduction in combined ratios when compared with those with low IT investment. Four areas for targeted IT investment So what kinds of technology investments can help insurers achieve growth and improve productivity and performance? Investments in four areas are critical: Marketing and sales: Marketing technology solutions can increase sales and processing efficiency, improve the quality of core customer-facing processes such as policy inquiries and policy applications, and improve customers’ overall experiences. McKinsey’s Insurance 360° benchmarking data show that tech investments in this category can facilitate top-line growth for P&C insurers by up to 20–40 percent; for life insurers, that growth could be 10–25 percent over a three- to five-year period. Underwriting and pricing: Automated underwriting fraud detection can improve the likelihood that insurers correctly identify fraud and set accurate prices. A pricing tool kit that analyzes pricing across competitors and enables a flexible, more segmented market versus technical pricing further improves profit margins. Insurers that deploy these and other product, pricing, and underwriting technologies have seen improvements in their profit margins by 10–15 percent in P&C insurance and 3–5 percent in life insurance. Policy servicing: Workflow automation, artificial intelligence–based decision support, and user experience technologies in policy servicing and within IT can improve the customer self-service experience and automate back-office processes, thus reducing IT and operations expenses. And state-of-the-art self-servicing options will reduce processing times and even improve customer experience. An analysis of programs for large-scale insurance IT modernization finds that insurers that deploy these and other product, pricing, and underwriting technologies have seen improvements in their profit margins by 5–10 percent in P&C insurance and 10–15 percent in life insurance. Claims: P&C insurers can use automated case processing—machine-learning technology trained to process basic claims cases—to segment more complex cases and significantly improve claims accuracy. Combined with better partner integration and steering technologies embedded in a transformation of the claims operating model, such technologies can help P&C insurers improve profit margins by 25–40 percent, according to McKinsey analysis of large-scale IT modernization programs. To realize the full value of IT investments, insurers must strategically allocate their resources and view tech as an asset, not a tool.

Read More

Spotlight

EFU General Insurance Ltd

Founded in 1932, EFU General is the oldest and the largest insurance company of Pakistan. EFU opened its doors for business with a vision to be the foremost in making financial futures of its customers secure. Eighty years down the road, that vision still remains foremost in all it does.

Events