5 Ways Tech Will Change Insurance As You Know It | Blog | Startupbootcamp

When you hear the word “insurance” you will not immediately think innovation, technology or “exciting.” But after this you might just change your mind. Insurance technology has the potential to affect nearly every essential insurance function, ranging from distribution methods to actuarial number crunching.

Insurers have traditionally been slow to adopt new methods and skeptical of change; however, spurred by customer expectations, ambitious upstarts and the possibility of expanding market reach the slumbering giants of the insurance world are beginning to wake up and embrace new technologies.

Blurring the lines between corporate tie and zip up hoodies, here are 5 ways that insurance (or insurtech) startups could change the way you see the industry forever.

1. Personalized Coverage - The “internet of things,” wearables and connected devices such as health and fitness trackers, internet connected cars and other machines could potentially change the entire insurance business model. The technology allows insurers to better track a number of variables that will allow them to offer customers new and specialized services. For example, several large insurers are already offering their customers free fitbits to track their health and offer incentives for healthy living by decreasing monthly premiums. Almost all auto insurers are collecting driving information from connected cars and using the data to reward safe driving and even prevent collisions all together.   

2. New Risk Assessment Models - Traditional risk assessment methods are based on statistical models with a limited number of variables and an estimated assumed amount of risk for each. With increased data on basically everything in the world, insurers can build new models to predict risk based on real time data. With more data points and real time analysis the probabilities of risk can be made exponentially more accurate using machine learning. What’s more, there is potential for risk assessment models so accurate that major catastrophes, failures, and data security breaches can be predicted and prevented before they ever even happen.

3. Better Customer Interaction - The current state of insurance business can be described as “sales heavy” with dedicated brokers actively pursuing customers and convincing them of the best policy to choose. In our digital age with price aggregation tools at their disposal, customers are more empowered than ever. Insurance companies will need to follow the lead of the retail industry by offering omnichannel access to customers with a digital first strategy. Companies like Guidewire are working to build digital technologies that support and empower customers to choose the best possible insurance plans at the best price and allow providers to manage the entire lifecycle of a customer from underwriting to quotations, and binding to renewals. This will transform the industry from a “sales push” to a more interactive “consumer pull” model.

4. Authenticated transactions - The same anti fraud

via www.startupbootcamp.org