Technology is driving change in every industry and region around the world and insurance is no different.
The financial services sector is a good example of how digitally disruptive technologies such as artificial intelligence, Big Data and mobile-first banking experiences have paved the way for innovative fintechs.
The insurance industry is no different. According to a report by Accenture titled The Rise of Insurtech: How Young Startups and a Mature Industry Can Bring Out the Best in One Another, for example, there is a growing recognition that “the insurance industry will ultimately see the greatest benefit - and the highest levels of disruption - from this global upsurge in innovation”.
Accenture also found that insurers are facing increasing pressure to go digital in order to compete with emerging technology and insurance startups. According to a summary of the the above report, it revealed that:
87% of insurers agree that technology is no longer advancing in a linear fashion, but rather exponentially
86% believe that innovation must occur at an increasingly rapid pace in order to maintain a competitive advantage
96% think that digital ecosystems are impacting their industry
In a recent article in the March edition of FinTech magazine, we explored some of the key technologies driving the growth in the insurtech sector. You can check out the full article here and read our focus on chatbots here.
In this article we look more closely at how data collection and analysis, as well as innovative technologies such as wearables are improving risk.
We find that, as developments like 5G and the expansion of Internet of Things devices find greater applications in the workplace, the ability for watches and vehicles, and even clothing, to feed data into a network is redefining the way in which insurtechs gather information.
According to KPMG’s Insurtech 10: Trends 2019 report, “Health ecosystems are essential for the future success of those operating in the life sector. Wearables are increasingly contributing to this market, and without access to these datasets, insurers will not be able to manage risks or engage with their customers.”
In the US, some insurers have started to offer customers premium discounts in exchange for data from their wearable health devices like fitbits. According to KPMG, insurer John Hancock requires fitness tracking data to be submitted as part of its policy.
US startup MākuSafe offers a full solution to insurers to increase data collection and compliance. It uses a device similar to a fitbit to capture and measure workplace environmental data and hazards to improve safety and compensation claim rates.
It then collates the data in the cloud, from where it is shared onto the insurer’s dashboard. CEO and co-founder, Gabriel Glynn has previously said that “we set out with the purpose of trying to solve two problems. We wanted to gather data constantly and in real-time, so we can identify before someone ever gets close to a dangerous exposure. Secondly, we wanted the device to be wearable.”
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.