While the insurance industry has not traditionally been the fastest or earliest adaptor when it comes to new technologies and business models, insurance companies are increasingly searching for ways to stay ahead of trends and to corner new markets.
Incumbents have understood that to keep up the pace of disruption, they need to work “Outside In” and to engage with new technologies from the start-up ecosystem.
One popular method that many insurance companies are exploring is InsurTech, and partnerships with InsurTech startups. According to a recent survey, three quarters of insurance companies recognize the potential of InsurTech – and of adopting digital transformation to stay competitive and thrive in today’s market.
However, many industry professionals are limiting themselves and their potential for innovation by taking a “top down” approach” that only considers solutions and startups from within the insurance vertical. Future growth opportunities will increasingly emerge outside a company’s traditional business, with these opportunities requiring disruptive new approaches and collaborative models.
Thinking outside the box
Insurance leaders that seek out technological innovation or disruption only via startups within their own vertical are missing out on the collaboration opportunities that technology advances from other industries can provide.
This approach often comes from a lack of understanding of the tech industry and its processes, products and landscape. On the side of InsurTech entrepreneurs, there is often a lack of full understanding of how large insurance corporations and enterprises work. As such, InsurTech solutions often reflect these misunderstandings and are limited in their ability to truly provide disruptive technology to the industry.
The forces that drives the disruption are mainly driven by technologies like AI, Image processing, Big data and analytics, Robotic Process Automation solutions, Machine learning, IoT solutions, and new business models that have been developed for other markets but can be used for the insurance business. These solutions, might unbind the insurance industry into fractions of a whole process.
Many of these technologies, are being used in other verticals than the conservative insurance business. These verticals are using matured and robust technologies that has already been proven.
Often technologies from outside of the insurance industry, when properly researched and targeted to address solutions for specific challenges identified by traditional industry veterans and leaders, can be a better fit than startups from within the sector. To collaborate successfully, and identify the right opportunities, it takes a combination of insurance expertise from industry veterans, knowledge of how big corporations work and act, and a broad understanding of the startup landscape within different fields and verticals.
Insurers are looking for pure InsurTech, while startups don’t always recognize the potential of their technology for the insurance business due to the complexity of the business. That is the “Innovation Gap” and thinking outside the box minors that gap.
Pivoting to new technologies
Forward-looking insurance companies have already begun to pivot and recognize the opportunities outside of their own industry to develop innovative solutions that enable them to stay relevant and compete in the market. These companies are looking beyond InsurTech startups; they are taking technological innovations and ideas from other vertical markets such as construction, Automotive, IoT, HR, Cyber and security and applying them to insurance.
The ability to use these matured technologies enables insurers to have “Quick Wins” and to deploy more easily new solutions with lower risk and higher success rate of Pilots (POC’s).
Samples:
Carbyne, is a national real-time emergency communication platform that helps rescue services to manage and control emergency reports via any available source of information. Carbyne has extended its technology to insurance use cases with Carbyne Insurance. This solution, which is based on Carbyne’s platform, provides insurance call centers with advanced video and geo-location capabilities to help reduce average claims and increase efficiency in the P&C claims process. The solution can be implemented and integrated with complexed core systems in days.
Hybrid artificial intelligence (AI) solutions –– which combine the power of AI with a human-controlled component – are another technology being used in the insurance industry. For example, Heat Intelligence - smart AI machines and global human workforce are being used for document and image processing, as well as extracting insights from pictures and videos, and from entities. The ability to transform unstructured data into structured data is crucial to the insurance business for many use cases (fraud detection, better underwriting, better On-boarding of a new customer and many more).
Being able to successfully pivot and use technological advances from other industries to create new products and services in the insurance sectors requires broad knowledge and awareness of the startup landscape to be able to identify the right opportunities and best fit. This is what I call “Insurtech 2.0”. Join the revolution.
Subscribe to receive the latest BDO News and Insights
Please fill out the following form to access the download.