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Outside China, how is InsurTech innovation being applied in 2023?

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Despite global economic uncertainty in 2023, driven by inflation and the cost of living crisis, insurers still need to focus on reducing costs, becoming more efficient, and winning more profitable business. TDI spoke to a number of market participants outside of China on how they viewed the role of InsurTechs in these efforts going forward. For more on the Chinese perspective see our overview article in this edition here.

“With the current economic pressures, it’s going to be a tough year for businesses. But it’s going to be an even tougher year for customers, as they navigate a cost of living crisis,” says Nick Ielpo, UK country manger at Prima, an online broker that has recently entered the UK market. Ielpo expects most innovation to be focused on pricing and product development, with companies using data and technology to “create better suited, better value products – products that keep their customers happy and their businesses profitable”.

“One of the challenges that InsurTech faces is that of not only being innovative but being so in a manner that appeals commercially to insurance businesses,” says David Butler, pre-sales consultant, EMEA, Charles Taylor.

While insurers will continue to invest in InsurTech, there won’t be the easy spending of more recent years. Insurers want to see progress not in terms of potential, but return on investment.

The economic climate will have a knock-on effect on the insurance industry, increasing claim costs and the difficulty of raising premiums without churn, says Butler. This may erode underwriting profitability and reduce insurers’ budgetary allowance for spend on InsurTech innovations.

“We can expect to see innovations that have a predictable revenue outcome to be those most widely adopted.

“While there are exciting developments in smart contracts, XR, wearables, robotics and drones, we are more likely to see increased automation, fraud detection and digitisation take priority for implemented use.”

Back to basics

Improved automation of policy and claims processes, while less notable, provide a measurable cost saving given the scale of policy and claims processing within insurers. For this reason, self-service will continue to grow as it provides value to both the customer and insurer, but it has to be properly executed.

Andrew Jernigan, CEO of Insured Nomads – which offers a range of travel and health cover – and reimburses members of their health plans using Mastercard payment cards (both digital and plastic), offered a personal example of how insurers are failing customers.

Jernigan recently received a notification from his health insurer’s portal saying he needed to provide a file. When he logged in, he was told the file was the incorrect type, although it was a PDF. On calling the insurer, he was told it could not be received via messaging, only uploaded via the portal. But the portal wouldn’t accept a PDF, so the insurer asked him to convert it to a JPEG. The problem persisted.

“On calling again, they told me to fax it or mail it to them – a multibillion dollar insurer” says Jernigan. “ That’s a good example of how broken it is today.”

Machine learning and AI accelerate at pace

“The current competitive landscape is forcing insurers to adopt predictive modelling and machine learning to stay on top of the game and solve business challenges across the insurance value chain,” says Genevieve Jubitana, head of insurance at Avata (image below).

Machine learning will not only allow for better risk profiling and pricing, says Jubitana, but we will see use cases in underwriting and claims management as well as in fraud detection, sales and customer experience.

Though we’ve seen incremental advancement in insurance through tech adoption, each year improving underwriting practices or improving customer service, the industry is on the verge of a tech-driven shift, through machine learning and AI, agrees Izik Lavy, P&C insurance expert and CEO at GeoX.

GeoX collects data periodically from aerial imagery and analyses it using AI algorithms, which allow insurers to collect relevant property-specific data, detect warning signs, and take preventative measures.

“As AI can detect patterns automatically, insurers can predict risk, making their processes more accurate, secure, and efficient,” says Lavy.

The climate crisis brings with it increasingly destructive weather patterns, says Lavy, Hurricanes and floods resulted in $120 billion of losses across the world in 2022 according to data from Munich Re and the insurance industry must evolve to keep the sector afloat in a “destructive and ever-changing threat landscape”.

“This is a battle [insurers] are currently losing, and therefore insurers need to embrace the latest technology becoming available to the sector, and utilise it to get ahead of the curve,” he adds.

AI will be particularly useful to take the human element – and error – out of many expensive manual processes and turn them into added-value services, says Mohit Manchanda, senior vice president and head of insurance at EXL.

One such area is data ingestion, which takes often unstructured data from multiple sources and relies on workers to pick the bones out of it. One global broker has achieved efficiency gains of more than 40% by implementing EXL’s solution, says Manchanda.

Operational improvements are not the only driver, says Manchanda. There is the desire to improve the customer experience, but also “a recognition of how to create and add value, rather than simply replace old processes”.

“Central to both is the commitment to put the customer at the core of process design,” adds Manchanda. “When insurers then understand the role that real-time data and analytics can play in informing that design, and in driving their new operational standards, then a virtuous circle is created in which all stakeholders’ benefit.”


Blockchain makes a comeback

After suffering setbacks in recent months as a result of financial scandals in the crypto market, blockchain developments continue unabated in the corporate space.

Blockchain solutions continue to promise a reduction in infrastructure costs, admin costs and simplifying document and security workflows as smart contracts can now be used to create binding agreements. This will help insurance carriers enhance existing processes and tackle legacy problems, if implemented effectively.

Embedded innovation

There is rapid growth of embedded insurance solutions coming through, particularly for freelancers, gig or platform workers, as well as professional and recreational gamers and digital assets owners, says Jubitana. This also includes bite-size, pay-per-use micro-insurance products. After all, why pay an annual premium, when you only need coverage for a specific period of time, she says.

“It won’t be very long until we’ll also see an advance of on-chain risk mitigation and new insurance solutions to support the increased activity of different industries and their clientele in Web3 and the metaverse(s),” adds Jubitana, “including sports, retail, luxury products, fashion, art, collectibles and the music industry”.

Embedded insurance also provides an opportunity for branding and marketing, because everyone wants to be seen as an innovator in their own space, says Luigi Alicante, insurance expert at digital transformation company Mia Platform, and co-founder of the Open & Embedded Insurance Observatory.

“However, in spite of the branding efforts, there is still limited adoption of new technologies and initiatives across entire operations,” says Jubitana.

“What we are seeing is more like window dressing at this stage and needs more time to become embedded, which is when the real value will be felt.”

Don’t forget governance

InsurTech innovations offer substantial benefits in terms of convenience and efficiency for customers. They also enable insurers to offer new methods of service provision and consequently, more opportunity for data collection that can improve risk identification and mitigation.

While the industry pushes ahead with service and efficiency, insurers need to keep governance uppermost in their minds, warns Butler at Charles Taylor.

“Regulatory discussions tend to lag in industries where rapid change occurs. The rights of policyholders, data protection and scope of consent for use of this data will need to be reconsidered,” says Butler.

“The use of big data or aggregated data sets introduce the possibility of heuristically driven decisions that unfairly disadvantage a particular group.”

Algorithm-based evaluations may need oversight or intervention to prevent unfair outcomes.

“Innovators will need to ensure that such applications are transparent to their own compliance functions and the satisfaction of regulators. As exciting as InsurTech innovations are, InsurTechs needs to remember that their widespread adoption will depend on them being proven as capable of treating customers fairly and delivering value for the insurer.”

Agents remain essential

Even as the direct to consumer channel has become more prevalent, the relationships between insurance carriers and agents remains the cornerstone of the insurance industry in many regions. Most insurance companies still rely on agents to place a majority – if not all – of their business.

To drive premium growth, insurance carriers need agents to decide to place more business with them. Independent agents have many options as to who they work with and just like consumers will conduct business with those businesses that make it easy or even pleasant to deal with.

Making use of digital customer service platforms, agents can connect directly with an agent support team or underwriting help desk without having to leave the digital domain they are in. They can then receive support through whichever channel they prefer: onscreen voice, video or chat.

Digital customer service frees admin time for agents to focus on better serving the needs of their clients, improving their service, and boosting customer loyalty.

An ongoing journey

For years, market commentators have warned that those who fail to innovate will be left behind in the new digital world order. Others have lamented that so many organisations have squandered the opportunity to drag their operations into the 21st century.

What’s clear, is that many of those in the market believe this market is not only instransition, but about to undergo a change – hit a milestone in the journey towards digitalisation.

While the Chinese market would appear to also be in transition (see this month’s China overview here), limitations imposed by COVID, regulators and wider corporate policy from the government has given insurers pause for thought.

For developed economies, it would seem we are likely to experience something of a breakthrough in 2023. Many of those who TDI spoke to for this article felt that those who have developed InsurTech capabilities are about to reach a tipping point.

Here, InsurTech will cease to simply be there to shore up creaking legacy infrastructure or fulfil specific back and middle office functions and begin contributing to the new, true digital identity of the insurer, that build its proposition around its customer.

This doesn’t signify the beginning of the end for those who remain stuck in mainframes and dusty shoe boxes. But it suggests it is the real beginning of a fully digitalised industry. This will have increasingly dire consequences for those who have dragged their feet, as they will find themselves left behind, but at an accelerating pace.

Insurance innovation taking place in 2023 by sector:


Climate change has had a huge impact on global weather patterns in recent years and this is the area we are likely to see the biggest transformation with the adoption of more AI and ML models for predicting catastrophic events, preparing better for them and building back better/safer.

Each year, roughly $719 billion in P&C insurance premiums are written to help US homeowners protect their property from the effects of destructive weather, fire, flooding, theft and countless other risks. Yet, much of that total value is at risk due to inaccurate and incomplete property assessment data.

New forms of analytics-driven aerial imaging technology – or Computer Vision (CV) – alongside predictive risk scoring analytics, we’ve found numerous unaccounted for hazards, such as overgrowth and brush in fire-prone areas, damaged roofing and siding and overhanging branches, that could put homeowners – and their P&C insurers – at greater risk of a claim.

Beyond more accurate underwriting and better claims processes, CV also lets carriers expand into new markets or increase their presence in existing ones.

Imaging can allow carries to identifying properties with forecasted higher loss ratios – solar arrays, overgrown vegetation, etc – and mitigate risk with warnings to customers, higher premiums and updated policies, offering personalised policies to customers with different risk levels.

This preventive measure, notifying and warning customers in advance of outstanding risk events, can mitigate risk and reduce damages. Insurers are better able to predict and prevent claims before they happen, ultimately saving time, money, and resources.

For example, Aon’s approach to climate based research has been to abandon a proprietary approach based on research it commissioned. Instead, while it still builds proprietary solutions, it encourages its research partners to publish their findings in the public domain to enrich the data available to all.


Increased automation is the trend, says Marty Ellingsworth, executive managing director, P&C insurance at JD PowerFocus. Claims customers will receive repair updates from claims management systems, because where this has been done, it shows higher satisfaction levels in their overall claims experience.

Usage based insurance will increase, as customers look for value in a rising rate environment.

“Adding their personalised usage to the pricing systems often returns rewards they never saw before,” says Ellingsworth, “but even if their rates are higher, the transparency of why is creating greater engagement.”

Using profiled forms for customers propagates more accurate answers across the insurance value chain, thereby improving data driven efficiency for consumers, agents, and employees.


Travel insurance is generally still not human friendly. Most products are built for distributors, not people. The claims process is slow and bureaucratic, requiring excessive paperwork and lengthy wait times. And policies/sites are jargon-filled leaving consumers confused rather than well-informed.

As an example, to combat this, InsurTech Faye handles claims in-house and reimburses claims via its digital secure wallet within 48 hours of receiving the necessary information. The app works just like Apple Pay or  Google Pay.

Faye says it is built for people, not distributors. There’s no huge profit – some as large as 80% – loading customers’ premiums. There is no confusing, jargon-filled language. You know exactly what you are buying and COVID-19 is covered from trip cancellation to medical needs while abroad.

Contact is via email, WhatsApp, chat and phone.

Yet it is 100% digital. There is no paperwork, with everything handled from within the app.

“Most travel insurance products you see are not tech-forward and built for consumers – they’re built for distributors who are taking home massive profits at the expense of confused and underinsured travellers,” says Elad Schaffer, co-founder & CEO at Faye.

“Travel coverage today typically comes in the form of jargon-filled add-ons after you purchase a flight or hotel stay. We built Faye to do the complete opposite – we can solve and reimburse you for claims digitally, all via the Faye app and Faye Wallet, and even pay you instantly for trip inconveniences so you don’t have to pay out of pocket.”

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