What do you get when you combine changes in customer behavior, expectations, and demographics with the rise of insurance start-ups and new insurance models? Pressure on insurers to pivot, invest, and develop new competencies to stay connected with the next generation of consumers.
Connected devices, robo-advisors, P2P Insurance, and IoT are just a handful of many buzzwords and evolving business models making headlines in every industry conference and publication in the recent years. While a lot of discussion around insurance innovation is focused on the future – there are changes happening now. Which begs the question, are we already experiencing the future of insurance?
To help you discover the insurance innovation eco-system, we hosted an Innovation and InsurTech Panel Discussion at the 2017 TAI User Group. Below is a sneak peek of what our panelists shared at the meeting.
Insurance Innovation Trends and Outlook
In a recent study conducted by KPMG, 75% of Insurance CEOs believe that the next 3 years will be more critical to the industry than the past 50 years. The primary growth strategies for insurers are to enhance existing offerings, develop new products and services and open-up new customer segments.
To achieve these objectives, it is evident that insurers need to improve and invest in innovation. However, insurers are also faced with innovation challenges such as “no extra time to innovate”, “lack of internal core skills”, and “cost pressures.” As a result, insurers are kicking off independent initiatives such as working with partners, investing in InsurTechs, and opening and participating in innovation hubs and labs (like Cookhouse Lab) to fill in the gaps.
We are excited to have Prateek Saxena, representing KPMG (US)’s Advisory Services share additional insight on life insurance and reinsurance innovation trends and outlook during our InsurTech Panel.
Artificial Intelligence and Machine Learning
If Alexa and Echo can order laundry detergents and play our favorite tunes, what can AI and machine learning do for the world of insurance? AI bots can help consumers better understand their insurance needs and provide answers to their financial questions through polling public data and learning about personal preferences.
Applications of machine learning today exist in areas of the application process and gathering of data for underwriting purposes. The machine-based algorithms can determine underwriting decisions and refer complex decisions for manual review.
These are some common and current practices for AI and machine learning in insurance. Join us at User Group to learn more from Vishwa Kolla, AVP, Head of Advanced Analytics, John Hancock Insurance, on AI and machine learning use cases in Life Insurance. We’re looking forward to his insights!
Peer to Peer Insurance
InsurTechs are entering the market with peer to peer (P2P) platforms, based on the ‘share economy’ or ‘risk-sharing’ approach, whereby policy owners with the same insurance type form small groups. Each member pays premiums into the group and if no claims are made, the members of the group get a cash-back incentive.
Besure, is an great example of a P2P insurance company that provides a fresh take on insurance. It provides individuals the opportunity to protect the things they care about by creating pools and inviting friends to join the community.
We are thrilled to have Jason Alleyne, COO & EVP, of Besurance Corporation at User Group to share his journey as a key member of this P2P start up.
Though on-demand insurance hasn’t made headway into the life market yet, there is ample activity in the non-life market that is making headlines. The simplicity of being able to turn insurance coverage on or as you wish is very attractive to the millennial demographic. Even though unit premiums will be higher, the convenience outweighs the cost.
Travel insurance is a product that often becomes an afterthought. I recently had the pleasure of learning more about Jauntin’, an on-demand travel insurance solution that functions via an mobile app. Travelers can obtain instant quotes, obtain travel insurance on the spot, enhance existing policies and submit claims in real-time. The Jauntin’ app also has location tracking functionality and can alert you when you’re near an airport.
Rainer Takahashi, Founder of JAUNTIN’ will be joining our InsurTech panel User Group 2017. You don’t want to miss the exciting chance to experience on-demand insurance in action.
Evidence that the future is now
For many of us, these examples only appear as ideas and concepts. However, when you come to learn insurance tech startups raised $1.7B across 173 deals in 2016, it’s indicative that this is now a reality. CB Insights published an article revealing the four focus areas that (re)insurance companies invested in in 2016: Digital distribution, connected devices, cyber security, and property/rental management.
As professionals in the reinsurance industry, how are we pivoting our business to support these areas of focus?
Interested in InsurTech Innovation? Join a project at Cookhouse Lab in 2018! View projects here.