Four insurtech trends to watch out for in 2022
Last year was a record year for investment in insurtech as funding reached a record-breaking $15mn in Q3 - more funding than in 2019 and 2020 combined. This growth is being driven by demand from consumers and businesses for insurance services that are delivered in the way that suits them – easy-to-use digital services.
The coronavirus pandemic encouraged an acceleration of digitisation initiatives across many industries including insurtech. Insurtech companies continue to be well placed to benefit from this trend as they keep attracting investment from major insurance companies struggling to innovate their own operations and services. As this booming market evolves, here are four insurtech trends to look out for in 2022.
1. Greater adoption of digital platforms for claims settlements
This year expect to see them move from the manual settlement of claims to digital continuing rapidly, as customers increasingly want insurance delivered how and when they want it, with easy-to-use digital services. Insurtech was always driven by digitising complex processes. But the growth of insurtechs offering quick and easy digital claims through online platforms was boosted by the Covid pandemic as insurance companies strive to keep delivering more services digitally.
Part of the reason the insurtech industry is attracting record investment is that major insurance companies struggling to innovate are partnering with agile insurtechs to innovate services for consumers. As more information is gathered to create ‘Big Data’, insurtechs are helping insurers adopt digital technology to improve customer service, which means claims are paid faster, with minimum fuss and hassle.
2. Better apps to support faster settlements
I anticipate the market will see improved apps developed and launched this year to support faster settlements. The trend for digital claims settlements is growing rapidly and this year will see apps leading the way in satisfying customer demands for quick and easy ways to settle claims.
There are already apps that collect real-time data, such as those that record the damage in a car accident to let policyholders upload photos in real-time. Systems like Verisk’s Intelligent Vehicle Inspection (IVI) allow policyholders to share photos of damage around a vehicle. The app can use the images to estimate how much the parts would cost to replace, which in turn confirms if the vehicle is economical to repair or a total loss. Apps like this, that utilise Big Data, Artificial Intelligence (AI), and Machine Learning (ML), can deliver automated systems that payout claims with minimum fuss.
These apps are getting more intelligent daily, offering greater capabilities for insurers to meet the needs of their customers in 2022. Analytics will continue to improve as ever greater amounts of real-world data are fed into these apps to change the way insurance is done in the future.
3. More monitoring through connected devices
This year is likely to see more monitoring through increased reliance on connected devices like sensors and wearables. For instance, in the pet insurance market, the use of devices like fitness and location monitors for dogs and cats helps insurers understand patterns of exercise. Using this technology may be incentivised to policyholders through price reductions in exchange for sharing data. As more information on pets, their susceptible conditions, and long-term costs are gathered, insurers are adopting digital technology and using data to make better decisions on pricing products.
4. Greater use of data analytics across insurance products
Insurers are now better placed to adopt technology to solve a business problem rather than for the sake of it. Data analytics will be a major growth area in 2022 as insurers look to make more of the customer data they are gathering, not just from a single policy but potentially across multiple policies.
We are already seeing discounts offered for multi-car insurance policies and I expect this trend to continue with insurers offering, for example, discounts to customers on health insurance if they are particularly active dog owners. By understanding more about consumers' wider behaviour, insurers can piece together risk and provide a more competitive offering across multiple insurance products.
About the author: Mark Colonnese is the director of Aquarium Software, a technology company that provides impartial advice, support, and direction to existing and prospective customers based in the UK, Europe, and US. He has 20 years of industry experience.
