You came across the term ‘insurtech’ in recent months or weeks, and you may be wondering: What does insurtech mean?
For that matter, if you’re an insurance agent, an employee at an insurance company, or work in real estate, you’re probably asking yourself: How are insurtech products impacting the industry? Will they affect my job? What type of insurtech insights could I gain by learning more about this technology?
If you’re looking for answers, you’re in the right place. This blog post will act as your comprehensive, go-to guide about what insurtech is, the different types of insurtech products, and how this technology can give you valuable insights.
What is insurtech?
Simply put, insurtech stands for ‘insurance technology’. It refers to the various technological advancements that are deployed across the insurance industry. Insurtech products allow insurers, their employees, and agents to delegate and outsource tasks to technology, streamline time-consuming functions, and gain critical insights about their customers and internal processes.
Before we go over the most prominent insurtech examples, let’s take a step back and look at how technology is impacting the financial sector, in general. After that, we can dig into the details of how insurtech products and insights are helping insurance companies and agents operate more efficiently.
Insurtech is a Branch of Fintech
Insurtech is a branch or sub-category of fintech. In short, fintech stands for financial technology. It refers to the at-large uses of technology and digital services in the financial sector, including banking, investing, real estate, and insurance.
Here are some popular fintech products and examples:
- Online Banking – Websites and apps that allow you to open a bank account online, deposit checks digitally, access electronic statements, transfer funds, and perform other banking functions.
- Online Brokerage – These fintech products and services enable you to digitally open an investment account, buy and sell stocks and financial instruments online, move your assets between different accounts, and view your portfolio statements from your phone or desktop device.
- Real estate & Property Technology (Proptech) – Many apps and websites let home sellers to put their home on the market while they enable buyers to digitally tour properties and place bids online. One of the most popular examples is Zillow.
In the insurance industry, insurtech allows customers to apply for coverage, file claims, access policy information, and service their accounts online through the insurer’s website or app.
Both fintech, in general, and insurtech, in particular, also include other detailed and more technical functions that can be performed digitally. However, you now have a general idea of how insurtech is related to technology and digitization.
At this point, we can take a closer look at how insurtech is used by different players in the industry.
What is insurtech used for and by who?
Insurtech is used to outsource, streamline, and simplify tasks that insurers, their employees, and independent agents usually perform via apps, websites, and software products. Both consumers and insurance companies use insurtech for claims processing, underwriting, property risk assessments, customer service, and more. Additionally, others in the property industry (like real estate agents and assessors) rely on insurtech to obtain records, for home valuations, and to analyze risks.
To be specific, here is how insurtech helps the following insurance and property market players with performing their job duties:
- Underwriters – Insurance underwriters rely on cloud software tools, computer programs, and similar insurtech products to gather data on a policy applicant and examine the risk of insuring them.
- Claims Departments – Certain insurtech products allow claims specialists to automatically pull out information from claims forms, digitally inspect damages, and detect fraud.
- Insurance Agents – Property & casualty (P&C), life, and auto insurance agents can save time and money and, at the same time, serve their customers in better ways through using chatbots/virtual assistants and claims-processing software. Just as importantly, they could minimize their risks via risk-related data insights, property reports, and advanced home inspection insurtech products.
- Appraisers – Property appraisers are increasingly utilizing drones, online datasets, and digitally-aggregated property reports to appraise and assess property values.
- Real Estate Professionals – Real estate professionals and agents deploy insurtech products to help their clients buy/sell houses, conduct home showings remotely, gather information on a property from various sources, and complete forms.
Needless to say, insurtech makes the jobs of those involved in the insurance and property markets much easier. To further illustrate, let’s take a look at the most prominent insurtech examples and how they assist real estate and insurance professionals with performing their job duties.
The following examples include some of the most prevalent insurtech products in both the insurance and real estate sectors:
Claims Processing Software
Claims processing insurtech products allow customers to file claims through their online accounts, automatically pull out relevant details from forms (such as policy numbers, the policyholder’s address, and the types of damages), manage paperwork, and organize claims. They also help insurers determine whether insurance claims get denied or approved.
Data & Behavior-based Underwriting Functions
These insurtech products gather data from various sources to identify trends and help insurers manage their risks. For example, they look at how at-risk a property’s area is for experiencing a natural disaster and analyze the behaviors of drivers (like those who belong to a certain age group).
Chatbots & Virtual Assistants
Artificial intelligence (AI) powered chatbots perform a wide array of customer service tasks. They can answer common questions, help policyholders file claims, schedule appointments with agents, and redirect customers to the right department.
For these reasons, chatbots are commonly referred to as ‘virtual assistants’.
Face Recognition Software
Face recognition insurtech products, as their name suggests, can recognize a policyholder’s facial features when they hold their phone’s camera in front of their face. They add an extra layer of protection because they’re used alongside the policyholder’s username and password. Face recognition software may be deployed when a customer wants to log in to their account, file a claim, access sensitive documents, and/or make a payment.
Instead of calling an agent/billing professional or sending checks in the mail to pay their premiums, policyholders can make payments by using paywalls that are integrated within the insurer’s app or website.
These insurtech products help property & casualty agents, appraisers, and real estate professionals evaluate a property’s condition, understand how at-risk it is to get damaged, and determine its valuation.
Mileage Tracking Devices
Simply put, these devices are placed in a policyholder’s car so that they track how many miles they typically drive, the roads that the driver commonly takes, and their general behavior. These details enable insurers to get an accurate idea of the risks that are associated with insuring the vehicle’s driver.
Flood & Fire Detectors
These insurtech products immediately alert homeowners and the emergency services in the event of a fire or flood. As a result, they can act promptly and stop any damages from occurring, which minimizes the claims that insurers have to payout.
Now that you have an idea of what some of the main insurtech examples are, we can dig deeper and learn about the benefits that insurers and agents obtain by leveraging these insurtech products.
Insurtech Insights & Benefits
In general, insurtech products have two benefits: First, they provide crucial and valuable insights about the insurance company’s operations and customer interactions. Second, they enable insurers and agents to operate and serve their customers with added layers of efficiency.
Data Anlytics & Critical Insurtech Insights for 2023
There are a lot of valuable insurtech insights that insurers can gain by gathering data, analyzing trends, and identifying potential risks ahead of time. Additionally, insurtech insights help insurance companies retain their customers and provide them with better services.
Since insurers obtain insurtech insights directly from their source, it isn’t surprising that predictive analytics is reshaping the insurance industry. To clarify, here are some of the most prominent insurtech insights in 2023:
- The data that insurance companies get from underwriting software, claims processing technology, chatbots, and mileage tracking devices enable them to understand the risks that are associated with ensuring a policyholder. In turn, they can use these insurtech insights to set premium prices that accurately reflect their risks.
- On a larger scale, the insurtech insights that predictive analytics and data reveal allows insurance companies and agents to group people together by their behaviors, demographics, and other common features. Based on this information, they could target new markets that have similar characteristics, especially those with relatively low risks and a high profit potential.
- By looking at insurtech insights and data about a customer’s past behaviors and interactions with the insurance company, insurers can better understand the policyholder’s preferences and needs. From there, they could use these details to improve the policyholder’s experience and enhance customer loyalty.
- Similarly, claims and underwriting tech tools enable companies to use past data to predict how their customers will file claims and interact with the insurer. With these insurtech insights at hand, insurers can allocate their time and resources more efficiently.
Insurtech Insights & Risk Assessment
Alongside data, insurers, agents, and even real estate professionals gain risk-related insurtech insights by leveraging certain technologies. This includes the following:
- Devices that track a vehicle’s activities give insurers critical insights about a driver’s behavior and the risk of insuring their car and/or belongings.
- Drones and satellite images provide accurate details about a home, property size, its condition, and more in a way that’s much less prone to human error than in-person inspections.
- Digitally-generated property reports reveal the risks of structural damages that a property may incur as a result of a fire, flood, or natural disaster.
- In the same vein, real-time property reports, such as those offered by PropertyScout.io, provide insurers and their agents with the most up-to-date information about a home.
As insurtech gets increasingly advanced and sophisticated each year, insurers and agents can obtain a lot of benefits by tapping into this growing market. These insurtech benefits go beyond data collection and risk management.
Here are some of the main insurtech benefits and advantages that insurance companies and agents may enjoy by leveraging the different forms of insurance products and examples that we covered in this blog post:
- Insurers and agents save money by delegating tasks to technology, such as chatbots and virtual assistants.
- In the same vein, insurers can allocate their resources more efficiently by streamlining certain processes (for example, underwriting and claims filing).
- Insurtech products minimize the likelihood of human error, especially when it comes to property inspections and collecting data.
- Data and predictive analytics enable insurers to minimize their risks and losses from floods, fires, and other types of property damage claims.
- Facial recognition and fraud detection insurtech products help insurance companies identify and prevent fraud at an early stage.
- By tapping into technology, insurers can cater to the younger generations and tech-savvy users.
Frequently Asked Questions (FAQs)
What does insurtech mean?
Insurtech means insurance technology, and it refers to websites, apps, and software that handle various tasks for insurers and agents. Insurtech is a branch of fintech, which stands for financial technology.
What is an example of insurtech?
Insurtech examples include claim-filing and processing digital tools, chatbots, paywalls, facial recognition software, devices that track drivers, flood and fire detectors, and more.
What is the role of insurtech?
The role of insurtech is to delegate certain tasks and job duties (which are traditionally handled by the insurer’s employees and agents) to technology. This allows insurance companies to save money, prioritize their employees’ tasks more efficiently, and enhance customer service.
What is the primary goal of insurtech?
The primary goal of insurtech is to enable insurers to save time, cut their costs, and boost their efficiency. In the same vein, insurtech products make it easier for customers to interact with insurance companies, apply for coverage, file claims, and service their accounts. All of this could be done online and through mobile apps.
What can insurtech do?
Insurtech products can handle a wide range of responsibilities. This includes processing claims, underwriting new policies, managing paperwork, answering customers’ questions, analyzing risk, detecting fraud, accepting payments, and many, many other tasks.
What is insurtech? The insurtech products, examples, benefits, and insights that you need to know in 2023
At this point, you should have a comprehensive idea of what insurtech is, how to leverage the various products and services that are on the market, and the critical insurtech benefits and insights that you could gain by using these technologies.
Whether you’re an insurance company’s employee, an agent, or a real estate professional, ask yourself the following: How is my position in the industry affected by insurtech? Which insurtech products can make my job more efficient and less time and money consuming? What type of insurtech insights do I need? Which of these insurtech benefits will help me the most?
This blog post has all the answers that you’re looking for, and it should act as your initial insurtech guide. Next, you want to figure out how you can take advantage of insurtech in a way that suits your unique personal and professional needs.