5 InsurTech Predictions for 2019
Source: CPP Group
At CPP Group we are right in the middle of working with our partners providing real value and innovation across the globe. There are many major trends for InsurTech in 2019. Here are our top five:
1. Tech to continue disrupt the insurance sector with China leading the way
InsurTech in 2018 made some initial inroads to providing new and innovative technology enabled insurance solutions. In the USA and Europe standout firms such as Lemonade, Oscar and Zego have started to slowly change the insurance landscape. There were major moves by the incumbent insurance companies throughout 2018 to engage with smaller, nimbler technology firms who can enable real innovation at speed.
The major Chinese tech-first insurance companies Ping An and Zhong An are leading the way with building billion dollar business where technology is at the core of how they build, deploy and manage insurance products.
Tech companies like Baidu, Alibaba and Tencent are investing heavily in insurance products and are driving massive innovation.
We believe that at the end of 2019 nobody will be talking about Tech disrupting Insurance – Tech and Insurance will be completely synonymous. Insurance companies that cannot think, act and react like the current Tech juggernauts will be consigned to a long, slow decline.
2. InsurTech Insurance as a competitive advantage for partners
Companies are slowly starting to understand that insurance is not just a value added ancillary service that can generate a few extra dollars at check out.
The most progressive companies see it as a way of building real competitive advantages. See Tesla’s discussion around embedding insurance in each car sale, Travellers and Amazon partnership in USA which offers Smart Home products and insurance quotes, and most interestingly Zego solving a major issue in the gig economy for companies that are struggling to get staff due to high priced, commercial vehicle insurance premiums. Zego responded by offering customers on-demand insurance as and when they need it. Simple but brilliant.
3. Blockchain still in chains
The hype around Blockchain has calmed down and there are hardly any real use cases in the insurance industry.
As for bitcoin, the get rich quick scheme has aspiring Lamborghini drivers nursing their wounds. Hundreds of millions of dollars have been spent on this hammer looking for a nail. Our view is that Blockchain is like that screechy dial up broadband (I’m showing my age here…) – Nice idea, terrible implementation. We think there will be a great version of it in years to come. One that will easily gain industry adoption.
4. AI – rise of the robots?
A 2018 survey by Accenture found that four out of five insurance executives believe that within the next two years, AI will work next to humans in their organizations, as a co-worker, collaborator and trusted advisor. It’s not surprising considering it’s already been two years since a Japanese insurance firm replaced 34 employees with IBM’s Watson Explorer AI.
Macro trends already include AI and machine learning in processing and personalising the insurance experience with chatbots automating the insurance experience and parametric insurance delivering real-time, frictionless experiences such as the Blink travel disruption solution.
Some people would possibly argue that people don’t trust AI. However, there’s a possibility that they don’t even know that AI is already taking shape in their everyday lives. Chat bots are a simple example but then there are virtual assistants that are powered by AI such as Google assistant and Amazon Alexa growing quickly in popularity. In fact it is estimated that the number of people using digital assistants worldwide will reach 1.8 billion by 2021.
If AI leads to improved customer experiences, ease of use and reduced costs, the application of AI is likely to be embraced over time, even if people have reservations about it.
5. Automated Insurance
Given the increased access and demand for data combined with the rising popularity of AI in the insurance space, 2019 has the potential for more companies to invest in innovative technology that will make insurance products truly intuitive.
Blink is one of the leading InsurTech companies in the global travel insurance space and a great example of how innovation is taking shape across the sector. Experience to date has shown us that customers want simple, easy to understand cover that works without any effort or input from them.
Invisible, automatic insurance is becoming reality and will soon become standard across all insurance lines as the advent of data availability increases exponentially.