Insurance Times asks industry experts whether the increasing relevance of insurtech in the sector provides hope for addressing the challenge of underinsurance

WE ASKED: How does the increasing relevance of insurtech in the sector provide hope for addressing the challenge of underinsurance?

Ian Bartholomew, chief underwritting officer, FloodFlash 


Ian Bartholomew

For FloodFlash, the challenge of underinsurance is what is leading to the increased relevance of insurtechs.

Take flood for instance. Around 80% of the world’s annual flood losses are uninsured. Experts are predicting that the difficulty insuring flood risks could lead to a climate related mortgage crisis in the years to come.

Climate change and urbanisation are making things worse each year, but the problem is fundamentally one of legacy insurance markets not being able to provide the affordable coverage in a sustainable way.

When difficult to cover risks like natural catastrophe endure or new risks emerge, it encourages new approaches that are typically easier to for smaller, more agile businesses. This isn’t a case of insurtech working in opposition to the market though.

Insurtechs are mostly designed to support specific parts of the supply chain. It’s not a case of reinvention, but of augmenting existing practices and making sure that insurers have access to data and technology that keep them competitive whilst customers get access to the products they need to recover from any catastrophe that befalls them.

When insurtechs fulfil a need that has emerged from underinsurance or difficulty providing affordable insurance at scale then they stand a much better chance of having an enduring impact.

Pikl - Louise Birritteri, CEO

Louise Birritteri

Louise Birritteri, founder and chief excutive officer, Pikl Insurance

Many insurtechs have a combination of underwriting capability – as MGAs –  and digital technology, often focused on enhancing the customer journey.  

Addressing underinsurance gaps often needs both of these skills and this is where insurtechs are increasingly relevant and performing a key role for customers. 

For example, Pikl identified an underinsurance gap in the short term rental markets where homeowners were not getting insurance which met their needs when shopping for home insurance.

Pikl’s solution to this was to work with the price comparison websites to change the customer buying journey. New questions were introduced to help identify these customers before guiding them through a bespoke technology journey, which had the ability to assess these customers’ specific needs, enabling them to compare insurance quotes that were relevant to their specific circumstances.

This has not only led to better customer outcomes and resolved the underinsurance issues for these customers via an easy to use digital journey, but it has also helped the insurance market via the large price comparison websites like GoCompare and to be compliant ahead of the Consumer Duty deadline, by making sure this customer segment have their needs properly assessed and appropriate product options clearly communicated to them.


Mark Budd, head of innovation, Zurich UK 

Mark Budd

Mark Budd 

Across the industry, the issue of underinsurance has become more pressing this year as the challenging economic climate led some policyholders to reassess their level of cover.

Rising inflation has also caused repair costs to climb across some sections of the market, meaning that existing cover may no longer be adequate in the event of a claim.

Technology can play its part in helping to alleviate some of these pressures. For example, insurers can also use a range of services including satellite imagery, street view and publicly available data to help calculate the rebuild cost of a property.

This means that their risk is covered correctly, without any guesswork on behalf of the policyholder, ensuring that all their costs are covered in the case of a claim. Zurich has already implemented this technology when assessing the potential rebuild cost of schools.

However, it’s important to remember that the issue of underinsurance cannot be fixed by innovation alone. The value of brokers cannot be understated in this debate. Technology cannot replicate the value of human expertise and interaction, but it can certainly complement it.