The longstanding, well-known insurance business prototype is rapidly changing. The insurtech business model is the future (and even the present) of the insurance industry. By adopting an array of electronic innovations, most insurance companies have been able to keep pace with consumer expectations and preferences. The caveat: agencies and corporations that do not update their operations will lose market share rapidly over the next five years.
Accenture’s research into consumer mindsets around technology revealed that around 70% of consumers view technology as ingrained in every aspect of their daily lives. This means that consumers are most comfortable with businesses that operate over digital formats.
Insurance corporations have responded to this reality by adopting a wide array of technologies for their customers and all employees. Smartphone apps, online claims submission and management, policy and plan management platforms, and in-house tools are all becoming an expected facet of a brokerage firm’s operations.
What IS Insurtech?
Here’s an easy way to conceptualize Insurtech: it includes any digital innovation that streamlines the operation of insurance firms, enhances analytics, or improves customer experiences.
Historically, the centuries-old insurance industry has been resistant to change. The sector was defined by wealthy, established companies that adhered to tried-and-true methods. Currently, industry experts forecast that 60% of existing insurance models will vanish by 2030.
The digitization of the insurance space has opened the doors for strong competition and shifting consumer demand. There is no longer a power struggle between legacy companies and tech-based newcomers to the insurance sphere. Instead, it is vital for all insurance firms to adopt robust Insurtech capabilities to survive.
73% of insurance CEOs now say that digitization is one of their highest priorities. As of this year, Insurtech is a $5.5 billion portion of the insurance industry. By 2025, it is predicted to expand to $10.14 billion. Clearly, insurance companies will either benefit from this shift or be wholly disrupted by it.
How can STG help?
Springtree Group supports brokerage agencies as they adopt and integrate Insurtech for the first time or expand an existing Insurtech infrastructure. Our in-house financing department can assist agencies as they acquire software and hardware that creates technologically updated, user-friendly interfaces for all employees, clients, and potential customers.
Additionally, we assist owners with placing their brokerage platforms up for sale. These transactions are completed with the expectation and understanding that a new buyer will make it possible for an entire operation to be launched forward to meet the modern expectation of highly sophisticated Insurtech capabilities.
Is Insurtech safe?
It’s important to note that when we discuss Insurtech as a business model, robust cybersecurity is an absolute must. When the transition to digital interfaces happens too rapidly and without forethought, vulnerability to data leaks and cyberattacks becomes a real concern. A data leak can destroy a consumer’s trust in a brokerage firm or private agency overnight.
So how can a brokerage prevent a security disaster? When a firm is creating its Insurtech platform, its cybersecurity measures must be proactive, strategically blocking potential attacks and leaks before weaknesses can be exploited. Existing tools include blockchain, AI, and advanced analytics, all of which can cooperatively build a predictive model around which cybersecurity measures can be crafted.
If your brokerage firm needs assistance funding your transition into Insurtech, expanding your capabilities, or finding a buyer who will bring you into the current decade, contact Springtree Group today. Our experienced team has facilitated countless such overhauls, and we would love to ensure your firm’s renewed competitiveness in the years to come.