The advancement of digital technology has taken the traditionally conservative insurance sector by storm – and for good reason. Insurance technology, commonly referred to as insurtech, offers innovative solutions for companies to better meet the increasing needs of consumers, as well as the ability to cost-effectively improve a multitude of operational processes.
However, while the industry has seen a rapid increase in the adoption of insurtech capabilities over the past year, things are about to gain even more momentum. In fact, experts agree that this year, the insurance industry is primed to put its foot down on the digital technology accelerator – and hard. This movement in modern insurance technology is known as Insurtech 2.0.
“[This year], insurtech will be key to modernizing technology stacks in order to get the most value from the Internet of Things, data and cloud.” – InsurTech News
What Exactly is Insurtech 2.0?
Simply put, Insurtech 2.0 is the anticipated next level in digital capabilities for the insurance industry. According to InsurTech News (ITN), this 2.0 version combines existing technology with the new – in ways that weren’t possible before. It goes on to describe this “supercharged digital storm” as waves of change that crash into and then strategically build on each other. This integration of old and new allows insurers to implement and streamline new digital processes – end-to-end, and in less time.
By 2025, the insurtech market is expected to grow to $33.73 billion and progress at a compound annual growth rate of 45.28%.
Are Companies Prepared for this Highly Energized Shift?
Insurtech 2.0 is predicted to be the next big industry disruptor. But the question remains: Is the industry prepared?
The fact is, this next level of technology will have a significant impact on things such as artificial intelligence, machine learning, blockchain technology and big data analytics. For example, artificial intelligence that leverages the power of telematics can fully automate the auto claims process from beginning to end. Not only will it allow insurers to track driver activity, speed and location at the time of an accident – it can also activate the initial claim process, including pre-approving auto repairs at the nearest garage. It can also systematically submit policy information and accident and image recognition data to underwriters for assessment and if the claim is approved, send payment to the insured’s bank account.
According to ITN, companies that are reluctant to fully embrace Insurtech 2.0 now will quickly lose ground over the next three years and experience a significant decline in value due to:
- Higher customer attrition rates.
- Reduced time to market for new products.
- Inability to attract and retain qualified employees.
- Delays in launching new digital initiatives that can help reduce costs and risks.
- Lower acquisition prices due to the lack of competitive growth, digital infrastructure, etc.
Having to replace or upgrade outdated platforms to keep pace with this powered-up digital shift can feel like a monumental undertaking. The good news is, it’s never too late for a company to proactively prepare. In addition, processes don’t have to be done all at once – they can be implemented gradually and continually built upon over time.
About Direct Connection Advertising and Marketing
As the insurance industry model changes, insurers and brokerage firms are looking to capitalize on insurtech opportunities to improve operations and to better serve the needs of today’s digitally immersed customers. At Direct Connection Advertising and Marketing, we understand the importance of leveraging insurtech capabilities. Whether you are launching a new product or implementing new service capabilities, our marketing experts can give your brand the competitive advantage it needs — at every stage of the buying cycle.
For additional information, contact Brad Nevins at firstname.lastname@example.org or 707.759.5391.