The biggest near-term impact of InsurTech will be its ability to revolutionise how insurers collect, access and analyse data, Fitch Ratings analysts believe.
For property/casualty (P/C) insurers, Fitch says telematics will be the differentiator as data generated from devices is the single most predictive loss indicator available.
The availability of more accurate data allows insurers to underwrite risker clients, expanding the segment’s potential.
As a result, Fitch believes P/C insurers will remain at the forefront of InsurTech adoption.
“Given the highly regulated nature of insurance, more sophisticated data collection and analytics practices are one area where InsurTech is beginning to break the mold,” said Julie Burke, Managing Director and Head of North American Insurance at Fitch Ratings.
For health insurers, unsustainable cost trends and misaligned healthcare incentives, data generated from InsurTech has the ability to make outcome-based care more realistic through electronic health records.
However, analysts say data management remains a hurdle as these records and claims are often complex, inaccurate and siloed.
Yet despite the healthcare system’s complexity, InsurTech is slowly showing promise for more specific issues like drug pricing transparency.
Concurrently, Fitch says the life insurance segment has been generally slower in implementing change and as a result InsurTech will have the biggest potential impact on migration to new, more sophisticated systems
Wearable technologies are also showing promise in improving data collection, however more advanced technologies like genetic testing and electronic health records raise regulatory and legal issues for the underwriting process.