Library: FinTech Times – Integrate, digitise, transform: Three insurtech trends for the rest of 2021
Executive summary :
Though the insurance industry can be slow to adopt new technologies, with the past year bringing new challenges to businesses, the rest of 2021 is insurtech’s time to shine.
Chris Ewing is CEO & founder of One Inc, a digital insurance payments platform that helps more than 170 insurance companies process over $15 billion in payments annually. Here he shares his top 3 predictions for insurtech trends in 2021.
It’s been a bumpy road
The past 18 months have brought disruptive challenges to businesses and consumers alike, and ‘sleepy’ industries like insurance have responded by prioritising innovation – seriously, if belatedly, taking to heart the idea that ‘every company is now a fintech company.’
After a hardening of the insurance market in the first half of 2021, the second half of the year should deliver more fruitful results amid the reopening of the economy, and insurers will now put at least three tech components through the paces after improving their stack over the past year – with game-changing differentiators for consumers, whilst solving lingering issues as they seek to actualise the value of their new technology.
Bold actions must follow
We all know what needs to get done – the hard part is getting it done. Partnerships between insurtechs and insurance providers will become even more essential over the rest of the year as the industry continues to lean into innovation in response to a radically different environment for working with both partners and customers. The key now will be for technology, strategy and product teams to integrate and optimise this technology in a manner that effectively augments (or replaces) the existing tech stack.
Claims goes digital
SMA’s Market Pulse Insights 2020 found that 81% of personal lines insurers and 57% of commercial lines insurers are moving forward with or accelerating digital claims payment technology plans, driven largely by consumers and the pandemic.
Customers are also wary of the prospect of handling paper checks, the processing of which costs insurers at least 10 times more than digital alternatives according to the Association for Financial Professionals.
Insurers will continue their push to implement a full-stack, inbound-outbound payment solution, offering flexibility, convenience and control to consumers and cost-efficiency to insurers.
Everything’s going flexible tech
One of the fastest-growing areas is leveraging a carrier’s current core with digital assets and services that can still integrate with these legacy systems. XaaS – or Everything as a Service – enables insurers to expand their technological capabilities and leverage these assets without building a full in-house IT team, to utilise greater functionality, reduce costs and ultimately again competitive advantage.
We expect insurers to continue leaning into transformative XaaS investments and partnerships in the second half of the year, particularly cloud-based services which rapidly scale while offering advancements in compliance, account maintenance and fraud protection.
Laggards to become leaders?
Insurers have woken up to the power of insurtech and broader fintech principles to revolutionise their cost structure, compete in a rapidly evolving industry and most importantly, the experience offered to consumers. The key questions now centre around sustaining this pace of innovation, optimising business processes and, of course, positioning themselves for what’s next.
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