By Sally Poblete, Founder and CEO of Wellthie
The excitement increasingly surrounding insurtech indicates that 2019 promises to be an even more meaningful and game-changing time for the insurtech space. Here are three insurtech trends you should keep an eye out for in 2019 and beyond.
This year was a breakout one for insurtech companies. The insurance industry has been long overdue for innovation and disruption, and 2018 saw the industry attracting both talent and funding. FT Partners Research announced InsurTech’s quarterly financing volume for Q3 2018 totaled $1.2 Billion, which is up from $749 Million in Q2 2018. The excitement increasingly surrounding insurtech indicates that 2019 promises to be an even more meaningful and game-changing time for the insurtech space. Here are three insurtech trends you should keep an eye out for in 2019 and beyond.
Any successful insurtech startup is not only passionate about transforming the current insurance model to be more cost-effective and automated, but is invested in exploring the role data analytics plays at the core of this process. Intelligent and productive data aggregation, integration and analysis, are crucial in achieving this.
When it comes to data analytics, the insurance industry’s antiquated business model has much room for improvement. Insurtech is modernizing insurance as we know it by implementing advanced big data analytics to optimize insurance products and services. And investors are taking notice. Significant investments are being made in data analytics and modeling techniques to improve nearly every part of the business. By embracing data analytics, your business can gain a competitive advantage by finding “new revenue opportunities, enhancing customer service, delivering more effective marketing, and improving operational efficiency.” Over time, this rise in digital innovation is sure to bring significant opportunities for a more efficient, competitive and sustainable progress for insurtech as a whole.
The vast and complex insurance industry has long awaited simplification. Insurers’ underwriting models have historically been a black box for consumers, while easy comparisons of complex data have been reserved for the experts. Transparency is critical to earning the trust of customers, especially in this digital age. People are now accustomed to online shopping, and they want procuring insurance plans to be less complicated — similar to shopping for and purchasing other high ticket items such as homes and financial products. Consumers desire their pricing and product information to not only be transparent, but comparable as “apples to apples” so they can make smarter choices. Users can access online marketplaces to compare prices and benefits of different plans side-by-side.
Partnerships between carriers and innovators
There is a deepening need for laser-focused investments and partnerships between carriers and innovators as insurtech has now matured into an everyday business. Insurance executive and insurtech dealmaker, Stephen Goldstein argues that “the team is what is ultimately going to make an Insurtech initiative a success,” meaning that incumbents and insurance leaders executing partnerships with insurtech companies are part of the recipe that is going to provide a positive ROI and make insurtech thrive as an industry. While 2018 was a year of exploring and experimentation for insurtech, 2019 will be the year of engaging and deepening those relationships.
At the start of 2018, insurance professionals predicted that the number of partnerships and collaborations between carriers and innovators would only gather momentum over the next year. And in June 2018, The Digital Insurer reported that partnerships remained a priority where insurtech was concerned. Insurtech companies are actively enabling new technologies which are utilized to provide increased efficiency and the ability to execute new tasks and analyses. These technologies are changing the industry on a fundamental level, all the while causing more incumbents to adopt these capabilities through investments or partnerships to compete effectively. The possibilities alone suggest that there will be expected growth in partnerships throughout the end of 2018 and well into 2019.
2018 proved to be a massive year for insurtech, with a dramatic increase in funding from Q2 2018 to Q3 2018. There has been demand for skillfully acquired and implemented analytics, transparent experiences for consumers and mutually beneficial partnerships. All three trends are being successfully observed in 2018, and are believed to gather more momentum to lead us into 2019 and later.