When Covid-19 touched the entire world, it drove cross-industry digitization and accelerated the boom. Insurtech was already a continuously rising sector in the greater tech, startup, and financial realms. The advent of insurtech behemoths like Wefox and Zego, both with recent valuations over USD 1 billion, becoming the latter the UK’s first insurtech unicorn, has fueled this expansion.
What’s driving this insurtech boom, and how can companies and entrepreneurs succeed in this space?
The insurance sector has a long history of being viewed as dull, stodgy, and antagonistic, and it is in desperate need of a full-fledged root-and-branch transformation. The current Covid-19 pandemic has highlighted the importance for financial firms to provide lasting, digitally integrated value to users in order to secure their long-term well-being, has accelerated this transition — both the need for it and its implementation.
However, this is a portion of the larger picture. The fact that insurtech resides at the nexus of a multi-limbed digital ecosystem, crucial to policyholders, potential customers, and enterprises alike, is a key factor in its growing popularity. Insurtech has the potential to operate as a link for a variety of sectors and verticals, while also giving everyday consumers a sense of autonomy and independence that is more important than ever.
Creating Connections Between Different Industries
Insurtech’s ability to uncover practical linkages between industries that have traditionally relied on compartmentalized, vertically constrained data is one of its strongest features. Health and wellbeing serve as a good example. Insurers are well-positioned to encourage consumers to improve their health by lowering expenses and offering lower rates in exchange for healthy behaviors. Beyond individual use cases, organizations can take this method by obtaining lower-cost insurance policies for their employees.
At its essence, insurance is a financial product. However, there is no natural symbiotic relationship between personal money and healthy living – the world of banking, loans, and mortgages isn’t exactly synonymous with health. Insurtechs can modify this relationship by leveraging their talents and technology to improve all areas of a policyholder’s well-being in ways that can truly make a difference in users’ day-to-day health.
The phrase “well-being” is the best way to describe this intersection. Financial stability, as well as physical and mental considerations, determines a person’s holistic well-being. Insurtechs are in a unique position to map and connect various well-being services and provisions, and the products that are being developed to do so should show the broad impact that tech-driven lifestyle tools can have.
A Symbiotic Relationship Between Insurtech And Business
To stay ahead of the competition, insurtech providers can offer the best value for money to firms and their employees. Let employers know that they don’t need to budget separately for insurance and employee well-being, especially when it comes to departmental budgeting.
In order to improve company efficiency, technology plays a critical role. Insurtech firms can use artificial intelligence to develop a data-driven understanding of their employees’ well-being needs and habits. AI-assisted solutions can support businesses in modifying programs by analyzing broad trends in employee engagement to determine what works and what doesn’t. Insurtechs have a vested interest in assisting enterprises in bridging gaps and identifying new opportunities in their well-being plans.
The Key Differentiator in Today’s Technology
The root of an insurtech ecosystem is advanced technology. What were at one time passive policyholder interactions can now be turned into insights that profit all stakeholders in the ecosystem. Some of these processes can also be gamified, which takes the excitement of a game and applies it to well-being activities (for example, encouraging policyholders to “level up” and improve their health and wellness routines in exchange for larger benefits such as cheaper premiums or vouchers).
Insurance innovation requires an ecosystem strategy, one that not only harnesses the potential of AI and uses technology to support holistic well-being, but also represents the character and values of any specific company. After all, technology is the result of an ecosystem. A vibrant startup scene requires the participation of a variety of stakeholders, including founders, investors, and regulators. As a result, it’s reasonable to apply the same approach to introducing tech goods as standard aspects of the insurance industry.
Reinventing a Win-Win Scenario with Insurtech Financial Products
Financial well-being is becoming a more important component of the complete well-being of today’s workforce. Employers who want to maintain their top employees are beginning to perceive financial well-being as more than just paying a salary; it now includes financial advantages that help people plan for their long-term financial futures.
Insurance has long been thought of as a lose-lose situation. When a claim is successful, the policyholder “wins,” while the insurer “loses.” By rethinking this method, insurers may gain from proactive insurance policies that reward clients for reducing risk by adopting healthy habits. This can result in a “triple win” situation for companies. Employees who are in better health are happier, more productive, and loyal, as well as being less expensive to insure.
Paroma Bhattacharya has dabbled in the realm of content production for over half a decade and possesses extensive experience in penning down pieces related to healthcare, technology, banking, and a wide range of other industry verticals.