Introduction
Over the past few months, I have been taking a close look at the interplay between InsurTech and Intelligent Automation. Having spent a significant amount of time in both areas, the lines between the two are becoming increasingly blurred, with InsurTech driving an enormous amount of innovation within the world of Intelligent Automation and Intelligent Automation driving many of the workflows that power the digital capabilities of InsurTechs.
The emergence of Covid-19 has shone a bright light on many of the challenges faced by Insurance companies to react quickly and moving forwards there will be enormous pressure on companies to embrace digital solutions that help address problems around scale, efficiency and customer experience.
Why InsurTech?
The question of the hour: why InsurTech? The past five years has seen a dramatic shift across the insurance industry. With over 1,500 InsurTech startups now operating around the world, the industry has become more relevant than ever. In fact, in just the past 5 years over $9bn in disclosed capital has been committed to over 700 InsurTech investments.
InsurTech focused events continue to be as popular as ever. The flagship event of the year, InsurTech Connect, has seen attendee numbers continue to accelerate (2016: 1,500 2017: 3,500, 2018: 6,000, 2019: 7,500+) with each passing year.
InsurTech investment over the past couple of years has also seen continued upward momentum. In 2018 alone there was $3.81bn in worldwide InsurTech investment. Q2 2019 saw $1.41bn, the fourth successive quarter of $1.2bn+ for global insurtech investment.
The “New Normal”
One of the quotes from last year that has really stuck with me came from Jorge Sant’Anna, the Diretor Presidente at BMG Seguros, who made the comment that InsurTech will become “The new normal”.
Jorge has articulated perfectly in a single sentence the impact that InsurTech has brought to the insurance industry. Early pioneers in the InsurTech space have continued to drive innovation forward and are forcing insurance companies to take a close look at their efforts around digital transformation, which is more crucial than ever.
The Intelligent Automation Journey & “The Two F’s”
To understand where automation fits into the InsurTech equation, we need to dive deeper into Jorge’s comment and understand what the driving force is behind “The New Normal”.
InsurTech was born out of the two F’s. A Fragmented environment and a customer experience polarized by Friction.
The industry continues to see fragmentation in a number of forms. The pain of dealing with legacy systems and processes has a knock-on effect throughout the insurance value chain. The exponential growth around technology has added additional layers of complexity around how, when and where to integrate innovative technology driven solutions. As a result, friction from both an operational side and customer focused side has permeated across the insurance experience. Complex legacy processes have gone untouched for years. Insurance has become slow, fragmented and out-of-touch with the needs of the modern customer.
Why Intelligent Automation?
From its early days InsurTechs are increasingly looking towards finely-tuned, fully automated solutions that cut costs and accelerate processes to meet customer needs. There isn’t a single catch-all solution that solves everything. Instead, companies are creating tools and capabilities that, when combined within intelligent workflows, provide a value offering that can dramatically reduce the level of fragmentation and friction across the insurance value chain. This shift towards intelligent digital tool, including cloud computing, the Internet of Things (IoT), telematics, blockchain, smart contracts, drones, artificial intelligence (AI), Robotic Process Automation (RPA), intelligent automation and advanced analytics has opened up a new era of innovative thinking across the insurance value chain and InsurTechs are quickly making customer-centric thinking part of their DNA. Modern technology to provide a simpler process, smarter coverage to price fairly and provide the right coverage and an insurance purchasing experience that exemplifies simplicity.
People, Process, Technology and Data
Companies like Care Bridge International are bringing solutions to the marketplace that leverage a delicate balance of People, Process, Technology and Data to tackle some of the challenges driving friction across the industry.
The recently launched “Analytic-Powered Covid-19 Calculator” is one such innovative product. One of the biggest challenges insurance companies will face in the coming months will be how to effectively handle the deluge of claims related to COVID-19.
For a lot of organizations, this sudden uptick in claims activity will put an enormous strain on resources that are already at capacity. Through the careful integration of People, Process, Technology and Data, companies like Care Bridge International are able to augment the traditional claims team with innovative and intelligent tools that help reduce friction, increase productivity and create the opportunity for smarter decision making at scale.
The Road Ahead
InsurTech and Intelligent Automation have been on a similar trajectory over the past five years.
Born out of the need to help companies address challenges around friction, fragmentation, scale, efficiency and customer experience, automated solutions have matured from the early days of Robotic Process Automation (RPA) into intelligent workflows that are able to harness legacy technology with the power of machine learning and artificial intelligence. InsurTech for its part, has evolved from a somewhat exclusive movement, into a state of mind that has permeated across the insurance industry – one that truly embraces innovation.
As we continue on this journey, I will be taking a closer look at the various components that are driving this shift into a digital future. Intelligent Automation is the sum of many parts – cloud computing, the Internet of Things, telematics, blockchain, smart contracts, drones, artificial intelligence and advanced analytics all have a key role to play in helping deliver solutions that are truly intelligent.
For InsurTech, the journey ahead is an exciting one. As insurance companies continue to embrace innovation and continue on their own digital transformation journey, the lines will continue to blur between incumbents and InsurTechs. As Matteo Carbone And Andrea Silvello so eloquently captured in the title of their 2017 book – “All the Insurance Players Will Be Insurtech”.