The rise of innovative technology and the resulting increased investment into technology-focused business models is impacting all industries of the world, including numerous areas of the insurance and reinsurance value chain and business systems.
FinTech and InsurTech have become increasingly common words across the risk transfer industry, as a need for greater efficiency combines with advanced and innovative technology to create disruptive business models.
In a recent study, Conning explores the rise of innovation-based disruption and how new business models, which incorporate advanced technology, is impacting personal lines insurance business.
Alan Dobbins, a Director, Insurance Research at Conning, said; “Innovative technologies are targeting different segments of the personal insurance business system.
“The technologies are rooted in mobile and digital—but include a wide range of categories, with fundamental changes in communication, data availability, and computation. Underlying these changes are several critical enabling technologies, from connectivity to analytics to artificial intelligence.”
Underlining the push for investment in InsurTech and FinTech business Conning explains that both the volume and value of insurance/tech deals has increased in the past few quarters. With factors such as greater access to deeper sets of relevant data, a need for greater efficiency, growing consumer acceptance of new technology, and lower technology costs all stimulating demand for InsurTech or FinTech investments.
“Insurtech investments are attacking different links in the personal lines insurance value chain, including product development, client acquisition, underwriting, and claims.
“Digital capabilities and the arrival of new competitors carving off pieces of the insurance value chain may well drive a significant restructuring of the industry. For personal lines insurers, the key will be trying to figure out which parts of this evolving system are areas where you provide the most value and how you are going to connect to the customer,” added Steve Webersen, Head of Insurance Research at Conning.