Insurance has never been so exciting with industry lines blurring and technology-driven implications across the board and across the globe. What opportunities are in it for you? How will it impact your clients and partnerships?
As we explore the fundamentals of the industry with “new economy glasses,” we have created a new member communication, Council Spotlight: Insurtech to give brokers clear line of sight into the changing industry dynamics driven by the exponential pace of business, changing client expectations, exploding data and technology and availability of capital.
Look for Council Spotlight: Insurtech in your inbox on a bi-weekly basis. Know someone who’d like to sign up? Ask them to click here.
So What’s Insurtech Anyway?
Insurtech, also known as Insurance technology, is an ecosystem composed of companies that use technology to make insurance services (p/c and health) more efficient. Insurance technology companies are generally startups founded with the purpose of disrupting incumbent insurance systems and corporations that rely less on technology.
Until 2015, Insurtech was covered by FinTech, (a line of business based on using software to provide financial services). At last count, there are 982 Insurtech startups across 53 countries with $16.5 billion raised in funding. Add in untold internal insurance industry investment and you can see how technology and data are being harnessed to lead to imaginative solutions aimed at making the insurance business wildly less costly. With more than 900 companies playing in the Insurtech space, individual focus varies.
On the commercial side of insurance, we see the focus broken into four primary categories:
7 Major Technologies Coming Together (AI, Cloud, Mobile, Social, Big Data/Analytics, Augmented and Virtual Reality and Blockchain)
The investments being made right now are mostly concentrated in process reengineering and enabling technology to solve existing problems in the inefficiencies of the business. Let’s put that aside today, however, and talk about a promising game changer in insurance and one of the seven major technologies coming together, blockchain.
On Monday December 5th, The Federal Reserve offered early clues on how it plans to monitor financial innovations such as blockchain when it published a long-awaited research paper on FinTech. What is blockchain, you ask? In short, blockchain technology facilitates peer-to-peer transactions without any intermediary such as a bank or a governing body. The use case in our space right now that illustrates this best is the smart insurance contract. The notion of automating the insurance policy once it is written into a smart contract template is compelling. The idea that it will pay out against the insurable event without the policyholder having to a make a claim or the insurer having to administer the claim has significant attractions and major implications for brokers.
For now, check out this short video from Barclays that explains smart contract templates and you can extrapolate the applications.
This year (2016) was when insurance started serious work on Blockchain. We believe that 2017 will see several significant rollouts. We’ll leave it there today and hope this stirs up some food for thought over the weekend.
Questions? Comments? Email firstname.lastname@example.org.
Ken Crerar, President/CEO
John Fielding, General Counsel
Cheryl Matochik, SVP of Strategic Resources & Initiatives