Insurtech transformation drivers for a post-COVID world
This week’s World InsurTech Report 2020 from Capgemini and Efma shows insurtechs haven’t stopped innovating. Despite global uncertainty, pioneers across the industry are continuing to collaborate with insurers and raise the bar for customer experience and trust by delivering streamlined processes, real-time reaction, and user-friendly interfaces as part of an ongoing insurtech transformation.
Insurtech is a thriving part of the fintech sector, with insurtech providers accounting for almost 15% of the Fintech 250. As a specialist technology PR agency, we work with various insurtechs and can see the sector is weathering the COVID-19 storm admirably; with funding increasing 36% in Q2 as investors continue to see the opportunity in digital-first disruptors that can drive digital innovation and efficiency across the insurance value chain. Uncertainty caused by the pandemic is causing the insurance industry to focus on critical priorities such as a superior digital experience, real-time response, insurance as a utility, crisis-proof processes and caring partnerships, and insurtech providers can help the industry meet these goals.
As consumer preferences and behaviours continue to shift in light of the pandemic, insurtech providers are finding and taking full advantage of unique opportunities to deliver enhanced services to both businesses and consumers. Let’s take a look at some of the ways changing needs and behaviours are providing openings for insurtech transformation for a post- COVID world.
Stay-home consumers do more online
Whether due to shielding, quarantine, local lockdowns or just working remotely, people are spending more time at home. This is driving demand for online services across all industries and insurance is no different, so providers that offer greater convenience and a seamless digital experience are inevitably attracting more customers.
A great example is the insurtech company, Bought By Many. After listening to the needs of animal lovers, the pet insurance firm became the first of its kind in the UK to allow users to submit claims entirely online, making it a viable, easily accessible service. It also offers free video calls with registered vets through the FirstVet app; an extremely welcome service during lockdown. As a result of its digitally savvy offerings, the insurtech company raised funds of £78M in May 2020, which will allow it to make further improvements to its customer claims experience.
Protection needs are evolving
In the age of coronavirus, consumers need to be covered for new and continually evolving situations, which means insurance companies must be agile and responsive to meet these needs. With the travel industry experiencing particular disruption, which isn’t likely to be resolved any time soon, travel insurance is one area where it is crucial to adapt and offer globetrotting customers a level of cover that is suited to these new challenges.
UK-founded travel insurance firm battleface, for example, has responded to the current climate by covering COVID-19 related medical expenses as part of its packages. It also covers trips to places the Foreign and Commonwealth Office (FCO) has identified as high risk and advised against travel to. By focusing its core offering on unconventional travellers, as well as building flexible customisation into its digital service, battleface exemplifies how modern insurers can innovate to meet the needs and expectations of the market. It’s also worth bearing in mind the small features and add-ons that make a big difference to consumers in a fast-evolving global landscape. Travel insurance products that provide around the clock availability and prioritise mobile applications are also part of the insurtech transformation, and will find themselves ahead of the pack when it comes to growing their consumer base.
Personal priorities are changing
The exceptional circumstances surrounding the pandemic are causing many consumers to rethink their personal priorities, particularly around safeguarding health and wellbeing.
Demand for private health insurance is expected to increase due to the pressure COVID-19 is placing on health services across the globe, as well as increased awareness of health-related issues. At the same time financial uncertainty could make it more difficult for consumers to justify the expense of such insurance premiums, so insurers will need to use insurtech in new ways to make policies more personalised and affordable. With consumers increasingly willing to adopt healthy lifestyle habits and share their health data, there is ample opportunity for health-focussed insurtech transformation. A recent UK study revealed 30% of citizens already felt a responsibility to take care of their health using technology before lockdown, and a further 22% plan to use technology for this purpose after restrictions are lifted.
In addition to health insurance, the pandemic is likely to increase demand for affordable life insurance. Insurtechs such as Ladder are responding to this need by delivering an entirely digital process with flexible coverage that can quickly and easily increased or decreased as circumstances change.
Insurtech was already a thriving market before the arrival of COVID-19, but the pandemic is accelerating its growth and driving insurtech transformation. It is causing unprecedented changes in priorities and behaviour that are increasing demand for the affordable, digital-first, agile, responsive, personalised insurance products that insurtech can enable.