Interest in insurtech grew substantially during 2016. Many traditional insurance companies have been hampered by legacy IT systems and regulatory transformation programs which means there have been limited funds to invest in innovation. This has left the industry somewhat behind others in the financial services sector, making the industry ripe for disruption. - KPMG - The Pulse of Fintech Q4 2016 Report.Insurtech is an industry that is growing very quickly. In fact, between 2017 and 2020, the insurtech field is projected to grow 10% every single year. This growth is being fueled by the fact that insurance technology is rapidly improving, and the technology has tremendous benefits for insurers and policyholders alike. As the insurtech industry grows, some key trends have started to emerge. These trends will affect how the insurance industry as a whole progresses in the coming decade. Here are five of the top insurtech trends to watch out for in the remainder of 2017. Strong Investment In 2014, insurtech investment was $800 million. By 2015, this number surged to $2.6 billion. Because insurtech is undergoing strong growth, and it is still a very new sector, there will most likely be many more investment opportunities. In fact, KPMG notes that it expects investment interest in insurtech to remain "hot" throughout all areas of the world in 2017. See also: 10 Trends at Heart of Insurtech Revolution Privacy Many new insurtech companies rely on customer data to provide key insights that can help insurers. While being able to analyze data can be extremely beneficial from an insurer’s standpoint, many customers are likely to continue to be wary about giving away any private information. To address this concern, insurtech startups are enhancing privacy features and security. This is particularly true as the insurtech sector begins to intersect with the health industry. Heavier IoT Use The internet of things, or IoT, is being used more and more in insurtech. In fact, in 2016, the IoT and AI combined accounted for 44% of all insurtech investments. This is because insurance companies thrive on data, and the IoT provides opportunities for many brand new types of data to be collected. The IoT also has the potential to be useful in a wide range of insurance niches. For example, it can be useful in auto insurance, health insurance and home insurance. Artificial Intelligence As AI and machine learning technology develop, they continue to become more and more useful in many different industries. Insurtech is no exception. In fact, many insurtech companies are now starting to use AI and machine learning to advance their data gathering and analytics protocols. One company, Fokuku Mutual Life Insurance, even replaced 34 workers with AI. Throughout 2017, AI is likely to continue growing into a stronger force in the insurtech world as it helps to make companies more efficient and streamlined. See also: Top 10 Insurtech Trends for 2017 Cost-Saving Solutions Through digitization and automation, many processes and functions of insurance companies are becoming cheaper and more efficient. For example, one solution called CynoClaim, by Outshared, is enabling 60% of claims to be managed automatically. Now that's impressive! Such solutions can result in dramatic cost savings for businesses in the insurance industry. Because there is so much to gain from solutions like this, it is very likely that insurtech cost-saving solutions will continue to be invested in for the rest of 2017. Through these insurtech trends, the insurance world is undergoing a disruptive modernization. The old ways of conducting business in the insurance industry are being replaced with digital and consumer-centered practices. Technology is the key that has unlocked all of these changes. For the remainder of 2017 and beyond, insurance is likely to become better, cheaper and more precise. It is a very exciting time for all of us in the insurance and insurtech industries!
5 Insurtech Trends for the Rest of 2017
Some key trends have started to emerge that will affect how the insurance industry as a whole progresses in the coming decade.