The Briefing - Insurtech: How can insurtechs support insurers and brokers throughout the Covid-19 pandemic?

WE ASKED: How can insurtechs support insurers and brokers throughout the Covid-19 pandemic?

Elliot Biggs, chief information officer, C-Quence

”At the start of lockdown, our industry was severely disrupted while brokers and insurers searched for ways of operating that worked in an environment where traditional insurance methods were no longer viable.

”What better opportunity for insurtechs to demonstrate their value?

”We quickly noticed a growing enthusiasm from brokers for our cloud-based trading and underwriting platform. Why? Because it is easily accessible from any computer with internet access and because it offers a very cost effective and highly efficient way to continue to service clients when traditional methods have become impractical.

”Automating fundamentals like underwriting, compliance checks and client specific document production removes a lot of unnecessary administration, adding to the attraction. And frequent upgrades mean continual improvement.

”Insurers too see the value of working with an agile, digital MGA unencumbered by legacy issues. Data and the value of real-time analytics offered across a portfolio of businesses means better decisions around risk appetite and rating. At a time when capacity has been tight, these are the things that make a difference.

”I am convinced that there will be no going back to the arcane ways that have characterised commercial insurance practices and that insurtechs are increasingly significant to the future of the industry.”

Matt Poll, chief executive and co-founder, Neos

“Insurers were built to support life pre-Covid, which we’ll never return to. The good news is they won’t have to invest significantly in innovation because it’s already been done for them by insurtechs. What they will have to do though is choose which insurtech integrations can bring their customers value and support them as a business during the pandemic.

”For instance, with many of us being stuck inside, home insurance claims have plummeted as crime reduces and people are on hand to react to any at-home disasters; Neos alone has seen loss ratios drop by around 40% to 50%. This will likely mean claimants will abandon old-school home insurance, as everyone adapts their lives to the new normal.

”Consumers will have to embrace change and part of this means rejecting rigid pricing models. Pricing rating questions like ‘occupied during night’ no longer correlate with many peoples’ lifestyles as remote working has become the norm. This will continue post-lockdown as peoples’ lives shift to a more flexible model.

”With geo-fence technology, some insurtechs can measure when people are home and utilise user occupancy insights to offer more personalised pricings based on individual risk assessments and occupancy levels.

”This is one example. The lesson is that insurers must stop seeing insurtechs as insurgents, but as innovators that could help them stand out from their competition and bring value to consumers in a new age.”

Tim Hardcastle, chief executive, Instanda

”One significant challenge that has faced insurers for a long time, and has been highlighted during this pandemic, is how to quickly respond to changing market demands. The problem many insurers have is their outdated legacy systems, which prevent flexibility with their business models. My view is that digitisation of the industry is the only way forward.

”Insurtechs can support this digitisation through providing technology that allows insurers to quickly and cost-effectively adapt their models, get to market in record speed and re-engage with their customers – something that will be more imperative as we emerge from the pandemic.

”While there has been increasing momentum for digital transformation, adoption has been slow. Insurers must embrace technology and overcome misconceptions. For example, contrary to popular belief, there is no need to go down a time-consuming and costly road of ripping out and replacing existing systems; insurtech models can simply sit on top of existing systems.

”Covid-19 is merely a catalyst for change that has been sorely needed in the insurance industry for a long time now. Insurtechs can support this by injecting the agility to help the sector not only move past the pandemic, but also to transform it into an industry fit for the future.”