The growth of insurtech companies is causing a revolution in the legacy insurance industry. They are utilizing technologies such as blockchain, AI, chatbots, big data, and other digital tools to make insurance more accessible to a wider audience.
These innovative companies are streamlining traditional insurance functions and developing new products that cater to digitally savvy underbanked consumers and micro-business owners.
One example of their efficiency is using robo-call channels to connect with customers and enroll them in new insurance policies, resulting in an impressive conversion ratio of over one percent.
Based on my experience in Southeast Asia, insurance products will not only be available in offline retail stores but also through mobile apps and websites.
The focus on hyper-personalization, offering contextual micro-insurance products with low coverage periods and premiums, is crucial for the sector’s future success.
How insurtech is changing the game in Southeast Asia
In 2020, insurtech in Southeast Asia saw over three times growth in gross-written premiums compared to 2019. Expectations include increased investments in the InsurTech sector and more joint ventures and partnerships between insurance companies and digital platforms.
Insurtech business models will evolve based on insurance coverage and regulatory frameworks in different countries. This evolution may include aggregator platforms, the introduction of broker licenses, and a digital underwriting model.
Who does what in the new insurance model?
In the coming months, insurtech and legacy insurers must define their roles to better serve the industry. Insurtech companies are collaborating with digital companies like lending and payment platforms to leverage strong marketing channels.
Legacy insurers, on the other hand, excel in underwriting risks and compliance, making them better suited to handle unpredictable events. They will advocate for risk-based pricing and push for personalized insurance products.
What’s ahead for the insurance industry
Partnerships between insurtechs and legacy companies come with challenges. Insurtechs need to focus on segment-specific products, while legacy insurers must adapt to changing customer needs.
Regulatory frameworks play a crucial role, with many jurisdictions setting up regulatory sandboxes for experimentation. It is essential for the insurance sector to innovate in product distribution and cater to diverse consumer needs.
Despite potential hurdles, the collaboration between insurtech companies and legacy insurers will expand access to simpler, more personalized, and affordable insurance coverage options for millions of individuals previously excluded from the market.
–
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image Credit: thodonal
This article was first published on September 17, 2021
The post Unlocking the potential: How the digital ecosystem drives transformation in the insurance industry appeared first on e27.