Across the globe, innovation and the opportunities provided by technological advancements are driving unprecedented levels of change. And the insurance industry is no exception, in fact, it’s ripe for disruptive innovation.
At heart of this innovation in technology and the opportunities it can provide to both enterprise and new market entrants. With the rise of InsurTech companies and approaches, we can truly challenge the status quo by dispelling the traditional “ambulance at the bottom of the cliff” insurance business model and instead focus on creating a more customer-focused, value-driven offering tailored to the individual needs of customers.
The opportunities are endless
Whether it is embracing the digital economy, creating new channels of engagement, or delivering personalized services to meet the changing needs of customers, the opportunities are endless for the application of innovative insurance technologies.
One core benefit is that it provides business with the freedom to start fresh or to adapt their technology stack by removing core legacy challenges and existing business processes to build a dynamic solution that meets both the current needs and aspirations of the business.
We’ve truly embraced the opportunities that InsurTech and healthtech can unlock as part of our innovation journey at nib, one of Australia’s leading health and travel insurers. For instance, we’re harnessing the power of data science and digital technologies to deliver more personalized healthcare for our members and to help improve individual and population health.
We’re also currently exploring how AI and other emerging technologies can be used to build great member experiences and at the same time improve operational efficiencies by augmenting existing teams for decision making in areas such as customer service, retention, claims and fraud detection.
One of the barriers historically has been that unlike some other parts of the financial services industry, such as retail banking, insurers have been reluctant to engage in deep collaboration with InsurTech Startups. I recall not that long ago we engaged with a startup that had two or three employees at the time for a machine learning proof of concept, which admittedly felt a bit awkward by comparison to our typically more polished partner engagements. At the time it was a far cry from the usual tier one or tier two suppliers we would normally see in our partner landscape, but the agility and enthusiasm coupled with them being devoid of legacy thinking were very refreshing and resulted in the ability for us to rapidly experiment with these new technologies.
As insurers, we have to be prepared to disrupt ourselves. There’s so much talk about “disruption to the industry” or new players coming in and stealing market share through disruption, but at the end of the day, there’s no reason why it needs to be a new entrant. Organizations talk about the transformation a lot, but what does that really mean? I’m sure the definition would vary across the majority of insurers. In my opinion, so many “transformations” tend to be iterative evolutions but are we at a point where we must “disrupt” rather than “transform”? For example, had the taxi industry tried to “transform” I’m pretty confident it would not have come up with a ride-sharing based platform, even as a non-core offshoot or startup.
Reaping the benefits
InsurTech can deliver a wide array of benefits for business and no one business will likely experience it in the same way. Each of us has different ways of approaching the use of such technologies and the complexities inside our organizations will often yield different results.
For example, with the help of artificial intelligence and our early adoption of cloud platforms, we’ve continued to enhance our customer service capability, while still maintaining our high levels of member satisfaction in a rapidly changing, complex, and regulated environment.
We’ve seen great success with our investment in our chatbot technology, nibby, a first of its kind innovation for private health insurance in Australia. It’s been fantastic to see how nibby has helped improve the member experience through faster handling times, first point resolution and directing members to the right information.
"There’s so much talk about “disruption to the industry” or new players coming in and stealing market share through disruption, but at the end of the day, there’s no reason why it needs to be a new entrant"
For many years we’ve embraced a cloud-first approach. For us, the adoption of cloud technologies was not just about the traditional benefits but has really unlocked innovation in areas such as AI and machine learning. There’s no doubt in my mind that insurers that are leveraging cloud platforms as foundational building blocks have the jump on others that haven’t when it comes to the application of InsurTech and associated emerging technologies. The DNA of our organization is one of experimentation and cloud is just one of many enablers to allow us to pivot at speed and innovate.
The future of InsurTech
With the ongoing explosion of Insurtech startups and platforms, we can picture a world where insurers will take advantage of greater access to data and data of higher quality than ever before. AI and machine learning investments will transform the industry through advancements in the ability to process and analyze data, resulting in accurate predictions and high value, personalized experiences.
It’s not hard to imagine a scenario where before long our products and services will adapt and orient around the ability for us to leverage data we are entrusted with by our members. Perhaps we engage virtually with our members through digital and other emerging channels, providing proactive insights into their health and how we can be supporting them through their entire health journey rather than simply being a founder of claims.
The key to embracing the full benefit of innovation in this space is the ability for a business to be agile in their testing and adoption of new technologies. We expect the increased investment and different funding models, including greater use of start-ups and accelerators, to allow companies to innovate at pace and facilitate the insurance of the future.
So, what does the Insurtech landscape look like over the coming years? More and more I think that with continued investment, including greater access to capital, combined with broader industry collaboration, we’ll see the rise and fall of both small and big players resulting in a completely different game than we’ve seen thus far.