The Problem with Price Comparison Sites

Insurance Technology

Article | July 20, 2022

The blockchain has penetrated the mainstream. We predicted this in our 2019 article “Blockchain-as-a-Service: the Accelerator for Blockchain Adoption” where we talked about the technology's ease of integration. Companies can seamlessly adopt blockchain technologies by referring to existing use cases like smart contracts, data authentication, and asset management. They can also take advantage of open-source materials. With the blockchain's accessibility on top of its formidable qualities, it’s no surprise that the digital ledger system is being integrated into every industry–from banking and healthcare to gaming and cybersecurity. As a cornerstone of the rise of financial technology or fintech, another industry it’s now serving is auto insurance. Here’s how the blockchain is revolutionizing the auto insurance industry: Benefits of the blockchain in auto insurance Multiple back-and-forths can slow down the manual processing of both insurance contracts and filed claims. Blockchain-based tools can speed this up by accessing necessary information through the data network. Insurers can easily access and verify the personally-identifiable information (PII) required for insurance contracts via the blockchain, as well. This means no lengthy coordination with other parties, shorter queuing time, and less paperwork. Moreover, the blockchain helps those who buy auto insurance worry less about their PII being used by malicious individuals and organizations. Monash University asserts blockchain security effectiveness by pointing out how its design can alert any network of even the most minor changes to the data it contains. This is because blocks containing data are marked with hashes–input strings of computation characters–that become invalid when information is modified. When hashes become invalid, the network is notified. With such a prompt and responsive alert system, insurance agencies can easily detect hacking activities to protect sensitive data. Blockchain applications in auto insurance The most significant benefit of the blockchain’s application in auto insurance arguably lies in optimizing property and casualty (P&C) insurance verification processes. Sound Dollar defines property and casualty insurance as coverage for any damage the possessions stipulated in your contract incurs. Blockchain-based tools, like smart contracts, can immediately gather relevant information from an insurer's network to verify damaged possessions. It can also identify which ones are covered by your insurance contract. This streamlined verification process saves insurers billions of dollars in operational costs and makes filing a claim much easier for the client. The blockchain can also be used to minimize and prevent fraud. Some of the best blockchain-based tools can identify whether an individual claims payouts from multiple insurers. These tools cross-check PII and non-PII with salient information from claims filed elsewhere to check for similarities. Moreover, the Insurance Innovation Reporter found that advancements in anti-fraud blockchain technology can detect third-party helpers, such as garages and brokers. This enables insurers to expand their data on fraudulent networks and prevent future cases of fraud. Challenges to full implementation of the blockchain in auto insurance Before full-on integration, developers and businesses have to address data integrity. While blockchain data cannot be edited, it does not ascertain that encoded information is true. This means data has to be verified before it's encoded on the blockchain. Blockchain-based technology is also expected to become more expensive in the coming years. As it becomes mainstream, demand for the technology and relevant development research will further drive operation and maintenance costs upwards. There is still much work to be done if the auto insurance industry wishes to fully integrate the blockchain into its workflows. But with the long-term benefits it brings, insurers and clients alike will undoubtedly look to blockchain-based technology for improved services and a better overall experience.

Insurance Technology

Article | July 15, 2022

The world is changing at a rapid pace, and no industry is immune to the need to evolve, upgrade, and innovate. The effects of mass digitization, artificial intelligence, machine learning, climate change, and the rise of financial-based cybercrime are all being felt in the business world. At the same time, consumer expectations have shifted dramatically, thanks in large part to companies like Netflix and Amazon, which have the technology and business models to provide the instant access to products and services that today's consumers have come to expect. When these changes are considered, it becomes clear that no industry, not even one as traditional, robust, and stable as the insurance industry, can afford to stand still. Trend 1: CARE-Based Distribution Channels Insurance companies are engaged in a "digital arms race," rushing to equip their distribution channels with digital tools to improve customer experiences. While CARE is the core experience that most insurance companies strive to provide in both distribution and sales, few achieve it consistently. Trend 2: Quicker Payouts Pay cycle time is fast becoming one of the most important differentiators between insurance companies. The winners of the future will use insurance technology to help them resolve claims quickly, at the touch of a button. To this end, companies are adopting AI-enabled tools to automate both estimation and inspection. Telematics insurance solutions are expected to provide greater levels of contextual information that will support the smoother, faster, and more comprehensive settlement of claims. Trend 3: The Rise of Usage-Based Models As the pandemic made consumers aware of the waste involved in paying for insurance on cars that sit unused in driveways, interest in usage-based insurance products skyrocketed in 2021. As the nature of work changes and many people's daily commutes become obsolete, winning insurance companies will offer products that are more in line with how their customers live today. Telematics devices will allow insurers to offer products based on how and how far users drive. Trend 4: Intelligent Automation For a long time, the insurance industry has been experimenting with automation. The first phase was robotic process automation (RPA), which was viewed as a way to speed up processes and reduce costs without requiring significant changes to the underlying applications. While this was effective at capturing low-hanging fruit—those ubiquitous repetitive steps that were an unnecessary feature of so many insurance processes—it never really attacked productivity and core functions that required automation.

Insurance Technology

Article | July 13, 2022

Cyberattacks are one of the world's most pressing concerns. In fact, they were ranked among the top ten risks in the World Economic Forum's Global Risk Reports for 2020 and 2021. 1 According to the reports, cybercrime-as-a-service is becoming more affordable, accessible, and sophisticated. Though previously regarded as a technological issue, cybersecurity is now a growing ESG concern for private companies, investors, regulators, and consumers. Why cybersecurity is material for private companies Cyberattacks are significant issues for both private and public companies because they increase the risk of exposing confidential company information or sensitive customer data, disrupting supply chains, increasing regulatory scrutiny, and/or causing reputational harm. In 2021, the average cost of a data breach (including ransom payments and customer compensation) was $4.24 million per incident (the highest level in 17 years),8 and the global cost of cybercrime is expected to be $10.5 trillion annually by 2025. 9 Companies with marketable client or intellectual property information face increased financial risk as a result of the impact that data has on both their value and brand loyalty. Furthermore, firms that rely heavily on real-time operations can expect high per-minute costs of lost opportunity and revenue if a denial-of-service (DoS) attack occurs. As a result, while some attacks may result in no direct material loss, these risks can have a significant impact on a company's valuation by influencing brand perception and operating costs. Private companies should consider these potential risks when evaluating cybersecurity investments, as underspending can significantly increase long-term costs. Cybersecurity is a widespread and rapidly growing issue that has significant material impacts on private companies.These risks are especially relevant as private companies prepare to enter public markets, where strict oversight controls are regarded as good governance. Companies, in our opinion, must have the necessary expertise and infrastructure to navigate these significant risks and the corresponding increase in regulation and disclosure expectations.

Article | April 13, 2020

It is common knowledge that there is virtually no industry that has been immune to the effects of COVID-19. The global pandemic has caused massive shifts in individual and industrial behavior and will continue to do so in the months, if not years, to come. The P&C industry, like many others, is reeling from the effects of the virus. Amidst all these events, it is important to assess how the insurtech industry is going to be affected by COVID-19.