Amanda | 28th July 2022 - 4 min read
Insurtech, over recent years, has grown immensely and gone from strength to strength as it gets ever more ingratiated into the fabric of the commercial insurance market. The growth we are seeing within the Insurtech space is astronomical, ‘InsurTech firms raised a record $15.4 billion in funding in 2021 — nearly double 2020’s levels’. Insurtech is prevalent through all areas of the value chain, with Appetite, Data, Payment and Quoting solutions being the predominant forms, but we also have an influx of Back-Office, Claims and more areas of Insurtech which are changing the landscape of the commercial insurance market.
While insurtech’s have wide and varied purposes, one thing they all share is that their solutions, in one way or another, are designed to benefit the end customer. Whether that is through, Telematics and ‘pay-as-you-play’ insurance or data analytics allowing carriers to make more informed decisions on cover, all the way through to the back-office systems that are increasing generating efficiency-based savings that can be passed onto the ‘insureds’.
Insurtech is just a new competitive edge to be leveraged within the market. Any insurtech worth its salt is all about creating a better service for insureds, or creating efficiencies that can ultimately be passed onto the insured. Insurtech is simply this, the oil that greases the cogs of insurance, creating a more fluid process of risk transfer than previously available. Risk transfer is fundamental to modern economies, and insurtech is the WD-40 that stops the hinges from creaking.
Possibly the best example of this is ‘Lemonade’, who have taken being customer-focused to a level that is fundamentally different from the norm the market has shown. Firstly, Lemonade is extremely tech-focused, leveraging the digital tools at its disposal to provide cover for the million customers it managed to gain over its first four years of operating. A third of all claims are processed automatically through their chatbots, cutting costs while also creating a simplified user-flow for their customers to quickly settle their claims.
Covid was a watershed moment for insurtech and its role within the market. It was the enforced kickstart towards a digital-first approach within the market as insurtechs helped keep the market afloat. It also changed the attitude among the market towards insurtechs; instead of being treated with suspicion, they were welcomed with open arms.
Covid in 2020 was the second largest loss event in market history, only behind Katrina in terms of cost. Despite that, we saw the highest ever investment in insurtech (at the time) of $7.5 billion throughout the year; insurtech is here to stay.
It is of course paramount that any insurtech is able to improve the lives of the carrier/broker, and streamline their operations, however, providing value in the chain aimed at the end client holds just as much (if not more) weight.
When any insurtech is being conceived, it firstly asks how can it improve the experience for the end customer and then how that solution can be monetised further up the value chain.
Manda spent the majority of her 20s working for London based non-profits, studying Person-Centred Counselling, and achieving a First Class degree in Creative Writing. Since 2020 she has been freelancing as a Copywriter, and joins us as Marketing Manager.
She loves animals, swing music, psychology, cake, pesto, ballet and walking to the top of really big hills.