The end of one-size fits all
Standard insurance coverage is a bugbear for many people, who find that their policies are chock full of things they don't particularly need, while they can't always get coverage for the things they do need. Insurtech innovations driven by sophisticated data analysis, are already allowing some customers to move beyond these issues. Zhong An, China's first complete online insurance company co-created by Alibaba, is carving new pathways and venturing into new segments that traditional insurers tend to shy away from. Their micro-insurance products, like protection against return-delivery on Tao Bao, have been sold to over 150 million customers, highlighting nascent demand. US-based Trov is another great example of how providing more customization is adding more value for consumers and the industry alike. Instead of a predetermined home insurance bundle set by insurers, consumers are able to identify key items they would like protected.
Upending traditional customer care structures
Innovation is also providing alternative distribution channels to the traditional broker-dependent push model, and helping to fix major customer care problems at the same time. A future of robo-advisors was all the rage at DIA Barcelona. Providing Artificial Intelligence with information on their existing policies can mean customers are able to connect with completely unbiased assistance 24/7. Conversational search can easily help them to find the best deal if they want to compare existing products. The often painful claims process also has a workable solution in sight. Thailand's ClaimDi is an auto-insurance startup that is doing away with inefficient paper-based claims systems. Their app is facilitating more open communication between insurers and their customers, leading to greater customer satisfaction.
Peer to Peer (P2P) Insurance
Much further into the future is the possible rise of P2P insurers, which may lead to falling premiums and even bypass the insurance industry entirely. The technology to create such a system is already available, and with the rise of sites like Kickstarter, people around the world are becoming more comfortable with the notion of crowdfunding and P2P lending in general. This highly disruptive yet exciting development is probably a long way off yet thanks to continued issues around compliance, but if insurers fail to become more transparent and cultivate trust with their audiences, it will be hard for consumers to overlook the potential cost savings and not jump ship.
Insurtech's most exciting solutions aren't promising to overhaul the entire industry on their own. Rather, they've latched on to the massive opportunities that exist for niche players to come in with modular products that solve particular pain points. That's good news for insurers, who have the option of improving on outmoded structures in an organic and manageable fashion. Growing consumer demand for clear, unbiased information is further creating an impetus for transparency and change, so what insurers cannot afford to do is stand still as their traditionally offline industry is taken further into the digital age.
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