How insurtech is changing the way people buy insurance

Issued by Orbeen

24 Aug 2020

It wasn't that long ago when shopping for insurance and other supplemental policies, such as an extended car warranty, meant having to either physically visit the office of an insurance agent and spend hours going over the available forms of coverage or placing a lengthy phone call to a call centre representative to discuss your options. Purchasing insurance and other types of supplemental coverage almost always has involved a long, tedious conversation with your agent to supply pertinent personal information, as well as information about your vehicle. The visit or phone call, along with the long, complicated forms and the subsequent mad dash to retrieve data requested by the agent, could easily become an all-day process. Not surprisingly, this all meant that shopping for insurance was the type of chore that people would put off as long as possible, regardless of whether they may be able to get a better deal elsewhere.

How insurtech is changing the way people buy insurance

Thanks to amazing advances in technology that have taken place over the past couple of decades, this scenario is very much a thing of the past. Shopping online for a new insurance policy or extended car warranty via the internet or even a mobile app has become commonplace. The insurance-buying process is becoming even more simplified for current and future drivers looking for a convenient way to get the most affordable price on the coverage they need, without having to pay extra for anything they're not going to use. Insurtech is already changing the way we shop for coverage, from the quoting process to the types of policies we are able to choose.

What is insurtech?

Don't worry if you're not yet familiar with the phrase "insurtech"- we're here to explain it to you right now! Simply put, insurtech is a combination of the words "insurance" and "technology," and is a relatively new term used to describe new technologies and innovations that are disrupting the insurance industry by optimising cost savings and maximising efficiency for insurance providers and customers alike.

Until quite recently, the insurance industry hadn't changed much over the years. The model stayed about the same for decades, with providers charging their customers premiums for coverage based on an assessment of their risk determined by a variety of factors. However, much like the way fintech has changed the face of the finance industry, insurtech has begun to revolutionise the way insurance companies do business. As with a number of other industries, new technologies that utilise big data, artificial intelligence, and the Internet of Things are paving the way for a more competitive insurance market.

How does insurtech work?

In the year 2020, nearly all of us have smartphones, wearables, and other mobile devices that we keep on us wherever we go. Because of this, companies are able to collect an enormous amount of data about us and use it to optimise our experiences and provide us with exactly what we need, when we need it.

Companies collect consumer data in order to better anticipate their customers' needs so that they can nimbly and efficiently meet and exceed our growing list of expectations for what we want out of a business. This is true across numerous industries - retail, food service, and banking, to name a few - and insurance is no exception. Gone are the days of filling out long, complicated insurance forms and purchasing a one-size-fits-all policy from an insurance agency. Consumers want convenience, accessibility, speed, and above all, customisation when it comes to insurance, and insurtech makes it possible for even small startup agencies to be able to offer a broad range of tailor-made policies to give the customers the coverage they need rather than charging for costly policies loaded with unnecessary features.

Collecting and aggregating data for each individual customer using insurtech means that insurance companies are now able to quickly provide coverage via a mobile app, adding an additional layer of convenience to the customer experience. Additionally, since insurtech can use consumer data to offer the right insurance products at the right time, people can benefit by qualifying for discounts and deals based on their up-to-the-minute driver data, sent straight from their car itself, that can make for significant cost savings compared to traditional insurance policies not driven by technology.

The future of insurtech

As we've seen in other industries that have been disrupted by technology, insurtech is changing the way consumers see insurance. Once viewed as a necessary evil - a bill to be paid, no questions asked, in order to comply with the law - insurtech is empowering consumers to take control of their insurance policies by tailoring them to align with their specific needs, budget, and lifestyle. Insurtech is being implemented now by companies such as Olive, allowing them to provide instant quotes that save customers time and money. This adds a great deal of value and an extra layer of convenience to the chore of shopping for insurance.

As our global community continues to be impacted by technology, we can count on further innovation from companies in virtually all industries, including insurance. The traditional way of purchasing an insurance policy will become less and less desirable to consumers looking to quickly choose the policy that best fits their needs and can save them money each month. After all, why continue paying a hefty premium for a policy loaded down with a bunch of coverage you may not need if it only takes 90 seconds to receive a quote that lets you quickly comparison-shop?

From the coffee we order over their mobile app each morning to bank transfers we're able to complete at the touch of a button on our smartphones, we are accustomed to having our specific needs met instantly by companies that seem to know who we are and what we want from our experience. Thanks to insurtech, purchasing and modifying our insurance plans don't have to be any different.