How new InsurTech models decrease the cost of risk cover in insurance

KRITHIKA VENKATARAMAN | March 7, 2018

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In any industry today, we often see new entrants disrupting existing business models in pursuit of growth. Most often, these new entrants follow one of two growth strategies: growth by increasing their share of the pie (e.g. Netflix disrupting through online on-demand video streaming, taking away market share from traditional movie rental stores) or growth by expanding the scope of offerings and increasing the size of the pie itself. However, in the insurance industry today, we see quite a few new entrants driving the cost equivalent of the latter: using various innovative means to decrease the overall cost base required for risk cover in insurance. This is being done specifically by addressing and mitigating the moral hazard and moral hazard aspects of customer behavior and through that, reducing instances of preventable claims. This consequently reduces the actual overall capital required for risk cover.

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Gen Re

Gen Re is a leading property/casualty and life/health reinsurance company. We are owned by General Re Corporation, a reinsurance holding company for global reinsurance and related operations and a subsidiary of Berkshire Hathaway Inc.

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