Ritika gets up at 5 am for an early morning flight and the last thing she is concerned about is booking a cab as she knows her ride will be just 2 min away. And to top it all, she doesn’t bother to even carry cash to pay the driver as she has her e-wallet to take care of that and the countless change that used to weighs down her purse. This is the story of a million millennials in India today. They probably don’t even realize how many things in their everyday have changed to make their life seamless and instant.
But this didn’t happen all at once, a few years back, learning from innovative technologies like Uber and Amazon, FinTech startups, started disrupting the banking sector. And today we see the insurance sector too is on the same trajectory with the advent of ‘Insurtech’.
Insurtech startups are technology-first companies attempting to significantly change the insurance industry landscape for the digital savvy millennial. While no one was talking about Insurtech a few years back, it now seems to be the buzziest word in the VC circle. For the proof-mongers, a quick look at Google search shows that the word is trending in a fashion similar to how FinTech did, a few years back.
But big, old industries also need big, new changes to revolutionize a industry-level landscape, and if the industry is a $5 trillion one, the task is bigger. Globally, Insurtech startups are creating some of the most exciting innovations in the industry. Right from Innovative business models like P2P insurance, Uber-like Marketplace, Migration to Complementary Services, On-demand Insurance to Internet of things (IOTs) to personalise and lower premiums, they are reaching out to the new-gen like never before.
So here is capturing some key Insurtech trends you will witness in 2017
1) Magic of Internet of Things (IoTs)
When your fitness crazy friend’s alarm clock reminds him that he hasn’t completed his fitness tasks for the week which is in turn calculated by his smart wristband, you are seeing pure IoT in action.
And insurance companies are not far behind in using its capability. In this digital world where people and data are all interconnected, insurers will offer personalised insurance services based on individual behavior and performance. Telematics in car insurance and fitness bands in health insurance are great examples of this trend.
- Telematics-based insurance – A telematics device can easily be connected to the car. This device measures several aspects of how, when and where you drive. And depending on this data, the insurance company assesses how safely you drive and thus is able to pass on benefits like bonus miles or lowered premium, to encourage customers to drive safer.
- Fitness bands – To benefit your always-on friend, the insurance company monitors a customer’s physical activity and rewards them accordingly. Not only this, this is predicted to result in a long-term behavioural change as well.
2) Migration to complementary services
To drive retention, insurers will start delivering enhanced services to the end users. For this, they will partner with startups to reduce their go-to-market time. For example, some global Insurtech startups are offering customers complementary services like health plans, booking doctor appointments, recommending the best doctor, these among other unique ideas. That means the customers will not only get insured, they will get health-related services as well, all under one roof.
3) Built for efficiency
Unlike conventional insurance business models, Insurtech startups are not constrained by age-old IT systems, large field forces, physical paperwork, which means they can penetrate the various parts of the value chain to drive higher efficiencies and pass-on the savings as benefits to the consumer.
4) On-demand insurance
To this generation, who is watching, eating and consuming everything on-demand, the flexibility and mobile first approach of Insuretech companies will be more than appealing. With on-demand insurance the power to how, when and what one wants to insure is handed over to the consumer! For example, a customer can turn on the insurance for her DSLR via a mobile app when she starts her hike. And, once back, she simply can turn it off.
5) Transparency in offerings
Serious advice, the last thing any company should try to do to our go-to-Google millennials, is to try to win them by confusing them! Understanding this change, Insurtech startups are making their insurance offers, policy details and terms and conditions more accessible to the customer. Which means the long, jargon-filled policy documents and explanations will soon be made extinct. Customers would be able to easily go through any part of an insurance feature they wish to understand, a more honest and transparent way of getting insured.
There has been a long-awaited need to create products and processes across industries, keeping in mind a real benefit for the end-customer. Some industries have been mobilized towards innovation to meet this need. And not only have these innovations benefitted people, but also have been profitable for the creators themselves. Insurtech startups seem to be on a similar mission i.e. to work towards providing people with the benefit that insurance was originally meant to give i.e. to simply protecting what one loves.