Global Insurtech Trends to Watch for in 2017

In attendance at InsureTech Connect 2016, we saw executives from a diverse set of companies speak about their experiences with and predictions for insurance technology.

Led by Nigel Walsh of Deloitte, the panel of experts we heard from included Daniel Hatkoff of Pitzi, Rob Moffat of Balderton Capital, Wayne Slavin of Sure, and Serge Taborin of Aviva. The discussion centered around identifying problems they believed that technology could solve for their companies and/or their customers.

Some of the most interesting highlights of the discussion included the ways that technology has evolved differently around the world, and how the insurance industry has been slower to innovate compared to similar verticals. On the other hand, all seem to agree that insurtech is now rapidly expanding to help serve carriers, distributors, and clients.

What's Unique About Insurtech?

These days, it's common to read such buzzwords as FinTech and MarTech. These coined words just describe a variety of advanced solutions for different industries and not just one thing.

The same is true of insurtech, so how is it different?

Region - Insurance technology has appeared to evolve differently and more slowly than the technology for other industries.

What's more, insurtech has progressed in unique ways for certain products and even different regions around the world, possibly due to the fact that some insurance companies operate in multiple niches across several markets.

Culture - Insurers need to consider various regulatory environments, cultural expectations, and the unique nature of their products.

While there are some exceptions, many insurers have a reputation for being conservative organizations.This might explain, at least in part, why the insurance industry has been so slow to embrace technology.

Differentiation - At the same time, the complexity of insurance products and high competition within the industry suggests that insurance companies would benefit greatly from technological innovation.

For example, machine-learning systems and connected devices can help improve customer service, claims processing, and underwriting. Programmatic media buying and better analytics can help carriers attract customers for competitive niches. The right insurtech applications can help a company develop an unbeatable competitive advantage.

What Should You Know About Global Insurtech Going Into 2017?

The executives on the panel represented companies from the US, Europe, and South America. Much of the discussion focused on how technological advances and basic tech needs differed for these various parts of the world.

For example, Brazil doesn't legally require auto insurance. This means that the auto insurance market only has about half the penetration it does in the USA. The industry in that country is really starting with the basics. Even so, Brazil offers plenty of opportunities for insurtech solutions to help insurance companies expand their reach.

Going into 2017, American insurers may need to innovate even more to survive. Unfortunately, many American insurers still struggle to let go of outdated legacy systems that are holding them back.

By contrast, online insurance technology is quite pervasive and competitive in the UK and other European markets, perhaps because carriers and distributors in those countries were not burdened by legacy systems and processes when modern systems arose to replace old ones.

The key point for understanding global insurtech in 2017 is that we must not underestimate the vast differences in insurance markets across different regions. Furthermore, we must consider the implications those regions have had on culture and law. In an industry heavily affected by legislation, where an insurance company chooses to operate will have a tremendous impact on it's future.