Will InsurTech eradicate traditional insurers?4th April 2018
In 2017 the InsurTech sector received $2.3 billion in funding, up 36% from the previous year. 2018 is predicted to be the year in which InsurTech moves from proof of concept to production as technologies are scaled for launch.
The question now is; what are the consequences of this market disruption? Like Netflix did to Blockbuster, will InsurTech replace the traditional insurance retailer?
Jonathan Davey, CEO of HUGHUB, discusses the insurance sector’s approach to InsurTech and how retailers can meet rising customer expectations without replacing their existing infrastructure through insurance business software.
The insurance sector has been hesitant with their investment in InsurTech. This largely falls down to ever-changing regulatory requirements, fragmented data systems and the rapid pace with which those InsurTech technologies evolve.
However, a tentative approach to InsurTech means that incumbents could be outpaced by those that are proactively taking advantage of new market opportunities.
Embracing new technology is critical to keeping pace with rising customer expectations. Consumers now expect and demand an Amazon-like buying journey in every aspect of their lives, and if their insurance provider cannot provide them with the service they’ve become accustomed to in other industries, they’ll simply buy elsewhere.
Without the right technology, retailers will also find it difficult to meet the core needs of their customers, provide a personalised service and deliver a customer experience where the customer’s relationship is both recognised and valued.
InsurTech as an enabler
However, it’s worth remembering that not all InsurTechs are out to disrupt the insurance industry or replace traditional insurers with new customer offerings. The majority exist to enable insurance retailers to advance and streamline their processes, working in partnership with them to provide improved customer engagement and overcome technology roadblocks whilst lowering operational costs
Ultimately, if insurance retailers don’t react to and operate with the market disruption and opportunity that InsurTech is bringing, they will find themselves increasingly marginalised, restricted and ultimately vulnerable to those that do.
It’s all about embracing the new era of technology, and HUGHUB works alongside insurance retailers to digitally transform businesses and exceed the expectations of today’s digital customer.