In 2021, insurtech has continued to affect the market landscape of insurance, with both large corporate entities and small agencies alike incorporating applied technologies at an accelerated rate. By surveying worldwide insurance trends, we can extrapolate the effects we’re likely to see across North America and Europe in the next few years.
What Is Insurtech?
Insurtech is a portmanteau of “insurance” and “technology.” It describes various innovations that are improving the efficiency of operations from both customer and agency perspectives.
Why Is Insurtech Implementation Accelerating?
As most market-savvy agency owners have noted, insurtech implementation has accelerated over the last two years. Current projections are predicting that insurtech adoption will grow by at least 40% per year through 2023.
There are several factors affecting this rapid rise, but the two most impactful thus far include:
- The Pandemic
Due to the ongoing need for social distancing, insurance agencies have had to adopt expanded technologies to remain competitive. Without remote options for both workers and customers, it would be impossible for agencies to maintain or expand their businesses.
- Customer Expectations
Even before the pandemic, customers had begun to expect a seamless integration of technology in most aspects of their lives. Today’s customer base wants to be able to accomplish as much of their business as possible via online interfaces.
Consequently, insurance agencies that have been reluctant to implement user-friendly technologies have seen their profits suffer.
How Is Insurtech Affecting the Insurance M&A Sector?
Insurtech allows insurance providers to glean more accurate, targeted information about their customers. Rather than relying on broad statistics, providers can use data from mobile phones, dash cams, vehicle GPS, and smartwatch activity trackers to see exactly which risks are most relevant for their client base.
Furthermore, agencies can utilize Artificial Intelligence (AI) to compile and analyze this wealth of data, yielding accurate insight rapidly.
As we can see, insurtech has reduced the more tedious work previously associated with the insurance profession.
Does this Mean a Reduced Need for Insurance Professionals?
Ten years ago, at the dawn of insurtech, there were predictions that broadscale adoption of these smart technologies would have a negative impact on the career opportunities for experienced insurance professionals.
These predictions have proven to be unfounded. Today, it’s clear that AI is no substitute for knowledgeable people. Instead, insurance technology is merely an array of tools that have made it easier for agencies to market themselves, interact with their customers, and gather relevant data about them.
Why Do Some Companies Resist Insurtech?
Insurance is a well-established sector that has functioned profitably for over a century without making significant changes. As a result, some companies are understandably reluctant to disrupt their current policies and procedures. Insurance is governed by complex regulations that vary greatly from region to region; therefore, the benefits of insurtech may seem to pale in comparison to the effort required to implement the technologies.
If you are seeking insight into how insurtech adoption could influence the marketability of your independent insurance agency or are seeking an agency that already possesses a well-established insurtech infrastructure, contact Springtree Group today.