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10 Insurtechs for Dramatic Cost Savings

Winning insurtechs tap into the key challenges that insurance carriers are facing. In this post, the second of seven different flavors of winners in fintech insurance: insurtechs that drive dramatic cost savings.

Although emerging markets are witnessing significant growth, most mature markets are saturated and experience margin pressure. This will show little or no change in the years to come.

Insurers are looking for ways to operate more efficiently in every major part of the costs column: in claims expenses, costs of operations and customer acquisition costs.

Technology purchases and investments by insurance carriers will further explode in these areas. And so will the number of fintech solution providers that want to cater to that need.

Learn from digital pure players

Technology definitely eroded the barriers to entry. Successful pure-play digital insurers know how to leverage technology to defy the conventions related to cost drivers that incumbents still work with. According to McKinsey research, incumbents for instance are not able to operate profitably with fewer than 1 million policies. They hardly seem to benefit from scale economies, and for incumbents the costs of using broker channels barely differ from using digital channels.

“The difference with pure-play digital insurers like InShared could not be bigger,” says Irene van den Brink, director of business development at InShared, the first fully digital insurer player on the Dutch market. In only five years, it achieved 10% market share in online car insurance, the highest NPS score in the market as well as the lowest cost ratio. “We run 500,000 policies with a core team of only 35 FTE [full-time employees]. But the scalability becomes even clearer when I tell you that 1 million policies could be managed by just a few more FTE and not the doubling of FTE you would see in a traditional model. With our digital model, we have proven to run a portfolio of P&C (non-life) at a 10% cost level, where we see that more traditional direct players have a cost level between 20% and 30% and broker models even higher than that. And this is just the beginning: Adding volume to our operations means we can go as low as 75 to 8% expense ratios, leveraging the full potential of a digital model.”

Apart from how digital new entrants leverage technology, we believe that two other factors are essential that explain the difference with incumbents.

First, having started from a clean slate, digital new entrants lack the complexity of a wide product portfolio, multichannel operations and having to comply with existing processes and IT infrastructure. Second, they understand this and stick to it. Successful digital new entrants are complexity-averse by nature. That is why they succeed in scale economies where incumbents don’t, and that is why they succeed in keeping their cost base that much lower. This is where many incumbents go wrong. Van den Brink says: “Virtually every insurance companies has embraced the need for a digital solution. But merely adding a digital channel or an app is not the way forward. In fact, this only adds costs and increases complexity in the IT landscape, it adds databases, systems and the links needed become an even bigger spaghetti.”

This is important to keep in mind when implementing fintech solutions to achieve substantial cost savings. The fintech solutions should address the root cause; they should dramatically reduce the complexity of current operations.

See also: Top 10 Insurtech Trends for 2018  

Go where the money is

Insurers spend between 60 and 80 cents of each euro of premium on claims. This means ample opportunities for fintechs that provide innovative solutions that reduce this amount. Think of solutions for improved claims management and fraud detection. Due to insurance fraud, 60 billion euro is lost each year in Europe and the U.S. alone. Of all fraudulent claims, 65% go undetected. Insurers spend no less than 240 million euro annually to tackle fraud.

10 insurtech solutions that dramatically reduce such costs

Everledger is using the technology behind bitcoin to tackle the diamond industry’s expensive fraud and theft problem. The company provides an immutable ledger for diamond ownership and related transaction history verification for insurance companies, and uses blockchain technology to continuously track objects. Everledger has partnered with different institutions across the diamond value chain, including insurers, law enforcement agencies and diamond certification houses across the world. Through Everledger’s API, each of them can access and supply data around the status of a stone, including police reports and insurance claims.

OutShared recently launched the CynoSure digital insurance platform, a complete head-to-tail digital insurer-in-the-box. CynoSure is a SaaS solution that covers the back-office system-of-record to all front-end web and app interfaces. For instance, with CynoClaim (one of CynoSure’s key modules) more than 60% of all claims can be managed automatically, resulting in lower costs as well as increased customer satisfaction. The platform can be used for both new market offerings and the renovation of established operations migrated to the platform. Results of the first implementations are promising: as much as a 50% decrease in costs and 40% increase in customer satisfaction. CynoSure takes six to nine months to implement, whether it is new or a migration – quite spectacular in the insurance industry, as well. (InShared is powered by OutShared)

EagleView Technologies provides aerial imagery, data analytics and geographic information solutions. Thanks to a fleet of 73 aircraft (and drones) that capture images on a year-round basis, EagleView’s library contains more than 250 million images spanning 12 years. This provides the most comprehensive current and historical view of properties available. Insurers use the library, data and visualization tools for instance to identify pre-existing conditions and estimate storm damage to roofs, leading to better decision-making in claims adjusting. In most cases, it is not necessary anymore to visit the site. In addition to these cost reductions, faster closing of claims leads to increased customer satisfaction

Enservio software uses demographic and other information to estimate the value of contents in a home. The software is, for instance, used to settle claims. Imagine a house being destroyed by a hurricane. The software allows the insurance company to reduce time-consuming negotiations, to eliminate discussions and to pay the claim three times faster.

Lexmark health insurance solutions provide carriers with the tools to expedite claims processing, simplify communications and reduce costs. The solutions extract data from claims forms with an accuracy rate of 90% or more, eliminating most manual data entry and boosting straight-through processing. Specific content management solutions integrate with legacy systems to provide health insurance document management for unstructured content in any form – paper, email, web forms, faxes, print streams and industry-standard formats – giving instant access to for instance claim adjusters.

AdviceRobo solutions use a machine-learning platform that combines data from structured and unstructured sources to score and predict risk behavior of consumers. AdviceRobo, for instance, provides insurers with preventive solutions applying big behavioral data and machine learning to generate the best predictions on default, bad debt, prepayments and customer churn. Predictions are actionable because they are on an individual level.

Shift Technology leverages data science to detect and model weak and strong signals of fraud, including fraud by organized gangs.
Shift Technology has developed algorithms to model data analysis of insurance policies and insurance claims, and external data while integrating the expertise of insurers. To be implemented and configured, the solution requires limited technical or financial investment. The solution is provided in a SaaS model and charged based on the volume of claims processed. The platform is used by general insurance companies as well as other actors in the insurance ecosystem, such as expert networks.

Not really insurtech, but too interesting not to include: PartsTrader is an online car parts marketplace that U.S. insurer State Farm is using to dramatically improve the repair process.

Repair delays caused by parts ordering issues result in millions of dollars in rental vehicle expenses daily across the industry, and high parts costs are reducing the number of vehicles that can be repaired. Using PartsTrader addresses both problems. The objective is to improve parts availability, quality, order accuracy, competitive pricing and process efficiency.

The LexisNexis Intelligence Exchange data platform allows insurers, among others, to review an incoming claim, for instance against claims made with other insurers, resulting in faster settlement of genuine claims and coordinated investigations of suspicious claims. The platform also detects potential insurance fraud; e.g. misrepresentation and non-disclosure of relevant facts, and lapsing of a policy in the second or third year due to, for instance, deliberate churning by an agent.

QuanTemplate is a cloud platform to analyze, report and communicate bespoke insurance information between parties. The software is built for the complex, collaborative world of the wholesale reinsurance markets. The users can manage their whole workflow within one app.

The platform reduces time and cost spent on reporting and analytics, while increasing speed and transparency.

See also: Global Trend Map No. 7: Internet of Things

The Internet of Things potentially has a huge impact on claims – by preventing an incident or by warning so that the damage doesn’t get worse. Connected devices provided by companies like Nest deploy sensors and Wi-Fi technologies to detect and report things like a leak under the sink before a pipe burst or to automatically shut off the stove when someone leaves home – so that house owners can handle burning toast before it becomes a burning toaster and insurers can avoid hefty claims later. Liberty Mutual and American Family Insurance already teamed up with Nest to decrease costs.

Similar preventive measures are promoted in ever-more-connected cars.

VitalHealth Software develops cloud-based eHealth solutions in particular for people with chronic diseases such as diabetes, cancer and Alzheimer’s. The company was founded 10 years ago by, among others, Mayo Clinic. The impact is huge because chronic diseases account for the majority of healthcare costs. VitalHealth Software features include care providers participating and collaborating in health networks, gaining web-based access to shared, protocol-driven disease management support based on established clinical guidelines, seamlessly integrated to and accessed from within existing electronic health records. Clients and partners of VitalHealth Software include top five health insurance carriers in Latam, Europe and China, eager to improve patient care and health costs management simultaneously.

All solutions that we featured in this blog have one thing in common: On the one hand, they contribute to significant cost savings, but on the other hand they improve customer engagement. Combining the two should be a leading design principle in digital transformation efforts.

Nest, OutShared, Everledger, AdviceRobo and VitalHealth Software are among the insurtechs that will showcase their innovative solutions at DIA Barcelona.

In our next post, we will focus on the third flavor of winners in fintech insurance: insurtechs that play new roles in the value chain. So stay tuned!

You can find the article originally published here.

10 Insurtechs That Tackle IT

Regulatory overhead + old technology = high prices + bad service.

A German insurer shared this telling formula with us, and it’s a perfect summary of the challenges that insurers are facing. Among the 75 executives we interviewed for our book Reinventing Customer Engagement: The next level of digital transformation, many said that maintaining legacy systems consumes 90% of technology budgets. Typical digital transformation programs therefore give a lot of attention to simplifying IT environments. Outdated systems not only result in high costs but also make it difficult and costly to act quickly and effectively on new customer wishes. The systems of insurers are often older than the customers they serve. Meanwhile, digital life has become so much more intuitive (Apple), interactive (Mint), contextual (Amazon), beautiful (Spotify) and intelligent (Google).

Insurers have to operate much closer to the market and foster the opportunities that new technologies offer with techniques such as the “lean methodology” to experiment with new ideas and processes, constantly tweaking these with fast feedback loops. So, in this blogpost, we included 10 insurtechs and innovative tech providers that help insurers with solving the legacy issue, taking IT off the critical path:

  1. KASKO
  2. Backbase
  3. Vlocity
  4. Keylane
  5. Faktor Zehn
  6. Roundcube
  7. Tieto
  8. OutShared
  9. Guidewire
  10. Ti&m

(The forthcoming DIA edition in Munich (Nov. 15 and 16) will, of course, feature the latest.)

1.  Kasko: Helping insurers to act like an insurtech startup

London-based Kasko is the first digital insurance platform for on-demand insurance products to enable insurance companies and brokers to quickly bring products to market. Kasko allows digital marketplaces and booking platforms to offer their customers contextually relevant insurance products via plugin or API. The company relieves clients from the regulatory and technological burdens associated with integrating directly within insurance companies. Kasko provides insurance solutions within the spaces of car, property, freelance, travel and events. By offering an API-powered agile insurance product platform that sits in between digital customer touchpoints and their customers legacy IT, they take the internal IT off the critical path to product launch.

Read more, click here.
Check demo, click here.

2.  Backbase: Omni-channel experiences, ready to go

Backbase has created the world’s leading lean customer experience platform, Backbase CXP. It has been designed to help financial institutions organize, create and manage deeply relevant customer experiences across all channels, on any device, to delight your customers and deliver measurable business results. Backbase has a flexible and modular architecture that puts insurance providers back in control of their digital experiences and strategy, which puts them back in touch with their customers. By putting their own business and digital marketing teams in the driver’s seat, insurers will be able to create the types of interactions that boost engagement, resulting in increased retention and a larger share of wallet and, most importantly, happy customers.

Backbase is a ready-to-go insurance solution. It fully supports internet, tablet and mobile experiences, including omni-channel, by facilitating cross-channel customer journeys, plus seamless handover and orchestration between channels and devices.

Read more, click here.
Check demo, click here.

See also: 10 Insurtechs for Superb Engagement  

3. Faktor Zehn: innovative agile insurance solutions

Munich-based Faktor Zehn is well known as the product house for agile insurance solutions. The international IT consulting and software company, provides innovative consulting services in combination with concrete solutions based on the platform-independent programming language Java. Faktor Zehn focuses on product management, policy management and sales and service systems to help insurance companies to innovate and develop competitive advantages. All products are developed to support insurance companies to generate speed of innovation as well as competitive advantages. Therefore, all business transactions are executable through web services to ensure a high rate of fully automatic processing. The user interface is optimized to process complex issues while leaving intact all primary batch processes, such as follow-up debit and premium due date mutations. While using products of Faktor Zehn, business and IT development teams of an insurance company work hand in hand with product development to improve time to market, to make sure that the products meet the high standards and to launch products or product variants quickly and efficiently.

Read more, click here.
Check demo, click here.

4.  Keylane: software with smart robotic applications for insurers

Keylane is the showcase of insurance 3.0. The state-of-the-art Keylane technology platform supports core processes such as policy administration, sales and distribution and underwriting, and enables companies to excel in operational performance as well as in customer service. Keylane’s software solutions enable companies to engage effectively with their customers; providing operational agility (founded on best practice), in the insurance and pension markets. New technologies such as speech recognition, social analysis and predictive analytics are already integrated with the Keylane solutions to make the insurance customer experience as easy and friendly as possible. The integration of core solutions with smart robotic applications provides front-line workers within a matter of seconds with a more holistic view of their information landscape. Improving efficiency, effectiveness and lowering of costs. The user-friendly multi-channel portals integrated with flexible administration systems enable insurers to boost customer experience as well as excel in operational efficiency, achieving cost savings of more than 50% on the IT budget.

Read more, click here.
Check demo, click here.

5.  Vlocity: Adding industry-specific process applications to Salesforce

Developed in partnership with Salesforce, Vlocity extends the Salesforce Sales Cloud, Service Cloud, Communities Cloud and other clouds with very specific business process applications for, among others, the insurance and health insurance verticals. The Vlocity apps on Salesforce add value to the user through a much faster time to market, a lower total cost of ownership and the agility of a product that stays in sync with Salesforce all the way through. Those are huge benefits from a business perspective.

ABD Insurance, a top 100 insurance broker in America, sells all different lines of insurance across multiple carriers and uses Salesforce, which ABD liked it but which couldn’t do all the things the broker wanted. Vlocity came in and deployed Vlocity Insurance in just 45 days.

Read more, click here.
Check demo, click here.

6.  Roundcube: Why a “fat” mid-office is healthy for insurers!

To be truly agile as an insurer, you need an almost unattractive body: a slim back office, a flat layer that enables connectivity at the front end and a rich, “fat” mid office that is the engine that drives it all. It’s the mid-office where connections should be made. We cannot wish our legacy systems away, we cannot simply upgrade, we cannot continue to add channels that add cost without bringing in more business.  But what we can do is use the back office for its core and stable strength by extracting relevant data and let it run the more stable admin tasks. This system can run at a different heartbeat and cost than a mid- and front office, while still making use of your existing investment. The Roundcube Insurance Platform is an agile mid-office engine where data becomes relevant information, where you can build experiences with the customer through relevant offerings.

Read more, click here.
Check demo, click here.

7.  Tieto: an ecosystem for business renewal

Tieto, the largest IT services company in the Nordic region and creator of the world’s first internet bank, digital health records and e-invoice solutions, has already helped a large number of worldwide businesses in banking, insurance, retail, manufacturing, healthcare and public services with the digital leap in highly competitive markets. What’s more, Tieto actively builds an ecosystem of leading innovators and startups to complement its offering on data-driven areas. Tieto has several internal startups in the company focused on Tieto’s main growth areas: Customer Experience Management (CEM), Internal Internet solutions and Security Systems. This benefits customers by allowing them an increased ability to speed up digitalization.

Read more, click here.
Check demo, click here.

See also: What Incumbents Can Teach Insurtechs  

8.  OutShared: a digital insurer in a box

OutShared offers an in-house developed and built digital insurance platform in a SAAS solution to the market. OutShared’s platform is an all-in-one insurance solution for policy management, quotations, claims origination and processing: from back-office database through middle-office processing to front-office web and app interfaces. Built on today’s digital ethos, and offered through strategic BPO and SaaS operations, OutShared offers the smart integrated solution for insurance specialists, developed for both new market offerings and the renovation of established operations migrated to the platform. HEMA for instance, an established retail brand, converted its traditional business to OutShared’s platform. As a result, the operational cost ratio decreased by 50%, the loss ratio improved by 10 percentage points in one year. The portfolio was converted in two months, from zero to live in six months.

Read more, click here.
Check demo, click here.

9.  Guidewire: Personalized and hassle-free customer journeys with among others a chatbot and Facebook messenger service

The California-based company builds software products that help P&C insurers replace their legacy core systems and transform their business. Providing insurers with solutions for the main drivers for a successful customer journey; digitalization, personalization and a real omni-channel strategy.

Guidewire products enable insurers to deliver excellent service for all stakeholder within the insurance lifecycle, increase market share and lower operating costs. The platform is based on three elements – core processing, data and analytics and digital engagement. These work together to strengthen the insurers’ ability to engage and empower their customers, agents and employees, allowing insurers to select, deploy and upgrade best-of-breed applications individually or as a pre-integrated suite, according to their requirements and priorities. More than 260 P&C insurers off all sizes and business lines around the world have selected Guidewire. In Europe alone, Guidewire has more than 45 customers across 11 countries.

Read more, click here.
Check demo, click here.

10.  Ti&m: the benchmark for a personalized digitalization strategy

Ti&m is a Swiss market leader for digitalization and security products. The ti&m channel suite is the simple, fast, trusted and efficient way to digitalize customer relationships. With flexible business modules, ti&m creates a personalized digitalization strategy. The ti&m security suite provides the necessary security for all channels and makes the digitalization journey safer and faster. Together they set the benchmark for business digitalization. The ti&m approach is cost efficient with an extremely low cost of entry and compatible with most of the current security providers

Read more, click here.
Check demo, click here.

5 Insurtech Trends for the Rest of 2017

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!

Top 10 Insurtech Trends for 2017

The beginning of a new year is usually the time to predict key trends for the year to come, and so it goes with the insurtech sector as well. Most lists focus on the latest sexy technologies and applications. But, after a year, we find these have hardly gained any traction and so cannot really be considered “trends” in our view. To call something a key trend, new and innovative is not enough. It requires adoption at scale. We, therefore, decided to take a different approach, resulting in quite a different kind of list.

Being consultants for several blue chip insurers, speaking at conferences and attending boardroom meetings, we meet insurance executives on a daily basis. Consequently we have a fairly good idea about what’s at the top of their agenda as well as the pace in which change will take place, and in turn what insurtech solutions are most likely to fit into those plans. These insights resulted in our Top 10 Insurtech Trends for 2017, illustrated by some awesome insurtechs that joined us at the previous DIA event.

Trend 1. Massive cost savers in claims, operations and customer acquisition

Already a major trend, of course, but one that will gain even more importance in 2017. Quite a few insurers face combined ratios that are close to 100, or even exceed that number. Digitizing current processes is absolutely necessary, for operational excellence and to cut costs. Digital transformation of insurance carriers started in 2015, really took off in 2016 and will be mainstream by 2017 and beyond. Virtually every insurer, big or small, that takes itself seriously will continue to look for ways to operate more efficiently in every major part of the costs column: in claims expenses, costs of operations and customer acquisition costs. Technology purchases and investments by insurance carriers will further explode in these areas, as will the number and growth of insurtechs that cater to that need.

With OutShared’s CynoClaim solution more than 60% of all claims can be managed automatically, resulting in lower costs as well as increased customer satisfaction. Results of the first implementations: as much as 50% decrease in costs, 40% increase in customer satisfaction. The solution takes six to nine months to implement, whether it is from scratch or a migration of established operations to the platform, which is quite spectacular in the insurance industry. Check this out.

See also: How Insurtechs Will Affect Agents in 2017

Trend 2. A new face on digital transformation: engagement innovation

At the end of the day, digitized processes and a lower cost base are table stakes. It is simply not enough to stay in sync with fast changing customer behavior, new market dynamics and increasing competitiveness. No insurer ever succeeded in turning operational excellence into a competitive advantage that is sustainable over the long term. More and more carriers realize that engagement innovation is the next level of digital transformation. From a customer point of view, this is not about a new lipstick or a nose job but about a real makeover. Engagement innovation not only includes customer experience, but customer-centric products, new added value services and new business models, as well. Insurtechs that really innovate customer engagement for incumbents have a great 2017 ahead.

Amodo connects insurance companies with the new generation of customers. With Amodo’s connected customer suite, insurers leverage on digital channels and connected devices such as smartphones, connected cars and wearables to acquire and engage new customers. Amodo collects data from smartphones and a number of different connected consumer devices to build holistic customer profiles, providing better insights into customer risk exposure and customer product needs. Following the analysis, risk prevention programs, individual pricing as well as personalized and “on the spot” insurance products can be placed on the market, increasing the customer’s loyalty and lifetime value.

Trend 3. Next-level data analytics capabilities and AI, to really unlock the potential of IoT

Many insurance carriers have started IoT initiatives in the last few years. In particular, in car insurance it is already becoming mainstream, with Italy leading the pack. Home insurance is lagging, and health and life insurance is even more behind. All pilots and experiments have taught insurers that they lack the right data management capabilities to cope with all these new data streams — not just to deal with the volume and new data sets, but more importantly to turn this data into new insights, and to turn these insights into relevant and distinctive value propositions and customer engagement. Insurtechs that operate in the advanced analytics space, machine learning and artificial intelligence hold the keys to unlock the potential of IoT.

2016 DIAmond Award winner BigML has built a machine-learning platform that democratizes advanced analytics for companies of all sizes. You don’t have to be a PhD to use its collection of scalable and proven algorithms thanks to an intuitive web interface and end-to-end automation. Check this out.

Trend 4. Addressing the privacy concerns

To many consumers, big data equals big brother, and insurers that think of using personal data are not immediately trusted. Quite understandable. Most data initiatives of insurers are about sophisticated pricing and risk reduction really. Cost savers for the insurer. However, the added value of current initiatives for customers is limited. A chance on a lower premium, that’s it. To really reap the benefits of connected devices and the data that comes with it, insurers need to tackle these data privacy concerns. On the one hand, insurers need to give more than they take. Much more added value, relative to the personal data used. On the other hand, insurers need to empower customers to manage their own data. Because at the end of the day, it is their data. Expect fast growth of insurtechs that help insurers to cope with privacy issues.

Traity (another 2016 DIAmond Award winner) enables consumers to own their own reputation. Traity uses all sorts of new data sources, such as Facebook, AirBnB and Linkedin, to help customers to prove their trustworthiness. Munich Re’s legal protection brand DAS has partnered with Traity to offer new kinds of services. Check this out.

See also: 10 Predictions for Insurtech in 2017  

Trend 5. Contextual pull platforms

Markets have shifted from push to pull. But so far most insurers have made hardly any adjustments to their customer engagement strategies and required capabilities. In 2017, we will see the shift to pull platforms, as part of the shift to engagement innovation. Whereas push is about force-feeding products to the customer, pull is about understanding and solving the need behind the insurance solution and being present in that context. Risk considerations made by customers usually don’t take place at the office of an insurance broker. Insurers need to be present in the context of daily life, specific life events and decisions, and offer new services on top of the traditional products. Insurtechs that provide a platform or give access to these broader contexts and ecosystems help insurers to become much more a part of customers’ lives, be part of the ecosystem in that context and add much more value to customers.

VitalHealth Software, founded among others by Mayo Clinic, has developed e-health solutions, in particular for people with chronic diseases such as diabetes, cancer and Alzheimer’s. Features include all sorts of remote services for patients, insurers and care providers collaborating in health networks, access to protocol-driven disease management support. All seamlessly integrated with electronic health records. VitalHealth Software is used by insurers that are looking to improve care as well as reduce costs. Among other OSDE, the largest health insurer in Argentina and Chunyu Yisheng Mobile Health, a fast-growing Chinese eHealth pioneer with around 100 million registered users that is closely linked to People’s Insurance Company of China (PICC).

Trend 6. The marketplace model will find its way to insurance

Marketplaces: We already see the model emerging in banking, and insurance will follow fast. Virtually every insurer offers a suite of its own products. Everything is developed in-house. More and more carriers realize that you simply cannot be the best at everything, and that resources are too scarce to keep up with every new development or cater to each specific segment. In the marketplace model, the insurers basically give their customers access to third parties with the best products, the most pleasant customer experience and the lowest costs. The marketplace business model cuts both ways. Customers get continuous access to the best products and services in the market. And costs can be kept at a minimum through connecting (or disconnecting) parties almost in real time to key in on new customer wishes and anticipate other market developments. In 2017, we will witness all sorts of partnerships between insurtechs and incumbents that fit the marketplace model.

AXA teamed up with the much-praised 2016 DIAmond Award winner Trōv to target U.K. millennials. Trōv offers customized home insurances by allowing coverage of individual key items rather than a one-size-fits-all coverage set with average amounts. Check this out.

Trend 7. Open architecture

A new ecosystem emerges, with parties that capture data (think connected devices suppliers) and parties that develop new value propositions based on the data. Insurers will have to cooperate even more than they are currently doing with other companies that are part of the ecosystem. When an insurer wants to seize these opportunities in a structural way, it is no longer only about efficiently and effectively organizing business processes, but it is also about easy ways to facilitate interactions between possibly very different users who are dealing with each other in one way or another. Again, banking is ahead of insurance. For our new book, “Reinventing Customer Engagement: The next level of digital transformation for banks and insurers,” we spoke to many executives in banking, as well. German Fidor Bank has set up an open API architecture called fidorOS, enabling fintechs to develop financial services themselves on top of an existing legacy system. Citi says that “any financial institution that doesn’t want to rapidly lose market share needs to start working in a more open architecture structure.”

The Backbase omnichannel platform is based on open architecture principles. It leverages existing policy administration systems capabilities and adds a modern customer experience layer on top, creating direct-to-consumer portals and giving the opportunity to integrate best-of-breed apps as well as improving agent and employee portals. Swiss Re, Hiscox and Legal & General are some of the insurers that use the Backbase platform. Check this out.

Trend 8. Blockchain will come out of the experimentation stage

When Goldman Sachs, Morgan Stanley and Banco Santander decided to leave the R3 Blockchain Group many thought this was proof that blockchain technology apparently was not as promising as initially expected. The contrary is true. It is not uncommon to join a consortium to speed up the learning curve, and then drop out and use the newly acquired knowledge to build your own plans and gain some competitive advantage, especially with a technology as powerful as blockchain. We believe a similar scenario will not take place in the B3i initiative launched by AEGON, Allianz, Munich Re, Swiss Re and Zurich. Thinking cooperation and ecosystems are just much more in the veins of the insurance industry. Plus there are plenty of use cases that cut both ways: improve operational excellence and cost efficiency as well as customer engagement. That is good news for the insurtech forerunners in blockchain technology.

Everledger tackles the diamond industry’s expensive fraud and theft problem. The company provides an immutable ledger for diamond ownership and related transaction history verification for insurance companies, and uses blockchain technology to continuously track objects. Everledger has partnered with all institutions across the diamond value chain, including insurers, law enforcement agencies and diamond certification houses across the world. Through Everledger’s API, each of them can access and supply data around the status of a stone, including police reports and insurance claims. Check this out.

A worker inspects a 5.46 carat diamond before certification at the HRD Antwerp Institute of Gemmology, December 3, 2012. HRD Antwerp analyses diamonds with specially designed machinery, as even for experts it is impossible to visually tell the difference between a synthetic stone and a naturally grown one. Picture taken December 3, 2012. REUTERS/Francois Lenoir (BELGIUM – Tags: BUSINESS SOCIETY SCIENCE TECHNOLOGY) – RTR3B8HW

See also: 5 Predictions for the IoT in 2017  

Trend 9. Use of algorithms for front-liner empowerment

Algorithms that are displacing human advisers generate headlines. Robo advice will for sure affect the labor market’s landscape. For a costs perspective, this may seem attractive. But from a customer engagement perspective this may be different. To relate to their customers, financial institutions need to build in emotion. Humans inject emotion, empathy, passion and creativity and can deviate from procedure, if needed. Banks and insurers need to create a similar connection digitally. With so many people working at financial institutions, there is also an opportunity to create the best of both worlds. We see the first insurers that deploy robo advice to empower human front-liners. This is resulting in better conversations, higher conversion and, finally, greater solutions for customers.

AdviceRobo provides insurers with preventive solutions combining data from structured and unstructured sources and machine learning to score and predict risk behavior of consumers — for instance, predictions on default, bad debt, prepayments and customer churn. Predictions are actionable, because they’re on an individual customer level and support front-liners while speaking to customers.

Trend 10. Symbiotic relationship with insurtechs

Relationships between insurers and insurtechs will become much more intense. All the examples included in the previous nine trends make this quite clear. Insurers will also look for ways to learn much more from the insurtechs they are investing in — whether it is about specific capabilities or concrete instruments they can use in the incumbent organization, or whether it is about the culture at insurtechs and the way of working. We see an increasing number of insurers that are now using lean startup methodologies and that have created in-house accelerators and incubators to accelerate innovation in the mothership.

The Aviva Digital Garages in London and Singapore are perfect examples. They are not idea labs, but the place where Aviva runs its digital businesses, varying from MyAviva to some of the startups Aviva Ventures invests in – all under one roof to build an ecosystem and create synergies on multiple levels.

This Top 10 of Insurtech trends that we will witness in 2017 sets the stage for the Digital Insurance Agenda. It reinforces the need to connect insurance executives with insurtech leaders, which is basically our mission. It helps us to create an agenda for DIA 2017 Amsterdam that is in sync with what insurers need and what the latest technologies can provide. Check Digital Insurance Agenda for more info.