Digital Transformation in the Insurance Industry

Insurance has remained fundamentally unchanged for centuries. It has been described as one of the least trusted industry sectors with the lowest level of user satisfaction. Accordingly, to Daniel Schreiber, Lemonade CEO, the cause of this consumer unfriendliness is in the traditional structure of insurance: every dollar insurance company pays for their customers is directly taken away from their profits, which makes insurance company’s interest directly contrary to its customer’s interest. 

Insurance Technology (InsurTech) pioneers are working towards an ecosystem in which insurance could be sold entirely online without using any insurance brokers, AI is able to calculate insurance policy rates without human error, customers are able to get insured within seconds and claims paid in minutes. If this was to be achieved profits generated from unpaid claims previously directed to the insurance company, could now be paid to the customer’s chosen common good.

The insurance industry is claimed to be more complex when compared to financial services, regardless if the statement is true we can begin to see parallels emerging. The ability to collect, analyze and display data in real time underpinned by transparent internal processes have been the basis for FinTech and as we see also InsurTech. Further, as InsurTech adoption grows as will the ecosystem, which will allow more platform complexity assumingly supplied through the API economy. 

For insurers, they can take a pragmatic first step by leveraging and applying proven digital finance API’s. Flexibility within these API’s should be the main driver when choosing a provider, as this will allow for changes in regulation/best practices, absorption of internal systems and integrations to ecosystem support as they come online.   

Read more at Crowd Valley News.