#Insurtech - New report signals faster digital transformation of insurance

The insurance sector is increasingly turning to digital technology for automating insurance claims, analyzing big data for trends, and the way clients access services. A new report highlights how this disruption is creating opportunities for start-ups.

A review of trends in global ‘fintech’ has been undertaken by business analysts KPMG, focusing on market drivers and technologies. Investment in technologies for financial services is high, running to $8.4 billion on a quarter-by-quarter basis. One area where there has been considerable investment is with the insurance sector. This is highlighted in the KPMG review “The Pulse of Fintech Q2 2017.”

The application of technology in the insurance sector has been dubbed ‘insurtech’. In recent years there have been various trends to note, such as using artificial intelligence to select the insurance cases of the greatest value. The KPMG report identifies three important trends: the rise of digital only insurers; the use of comparison sites; and the application of artificial intelligence to help process insurance requests and claims.

The first trend noted in the report is that many insurance companies are transitioning to become digital only insurers, abandoning the traditional office and the concept of the client ‘dropping in’, and offering insurance services via apps. The use of apps is important for new challengers given the fall in television advertising which is necessitating a shift to mobile and online channels to advertise insurance services.

A number of new companies have entered the market, challenging established insurance providers. These challengers include digital only insurance providers Trov and Cuvva; the majority of these start-ups, up to 90 percent, are based in the U.S. These challengers tend to be niche providers, such as covering fraud or offering services for clients that carry greater financial risks.

A telling statistic is that some established insurance companies have been in business for over 300 years; whereas some insurtech firms have been in operation for less than 300 days. This is a clear signal for legacy firms to consider competing with start-ups within the digital realm.

via www.digitaljournal.com