InsTech London will highlight UK InsurTech innovation
ITC’s (InsureTech Connect) digital-only 'September to Remember' event will run between 1 and 18 September, spanning across 35 locations in EMEA, APAC and Americas, and featuring over 200 of the best InsurTechs operating in the market today.
The event will then culminate in , an immersive two and half-day event (21 to 23 September) which will feature more than 200 speakers, over 100 hours of streamable content and provide many opportunities for learning, networking and collaborating.
Representing the UK InsurTech
Readying itself for the UK’s contribution to the three-week event on 3 September, InsTech has opened up submissions for the most innovative startups with less than USD$30mn total investment and fewer than 100 employees to register.
Only five entries can ultimately be selected to pitch at the event, meaning that competition is expected to be strong.
InsTech, one of the fastest growing insurance-related communities, prides itself on bringing companies of all sizes together in the spirit of strengthening the market. Not just exclusive to the UK, 50% of the organisation's membership actually comes from outside the country.
“We are delighted to partner with ITC + DIA and lead the UK part of the World Tour,” said Matthew Grant, Partner of InsTech London.
“We will be selecting five start-ups that we believe are amongst the best representations of UK innovation, with solutions that are, or could be, applicable globally. InsurTech is increasingly global, and the UK sits strongly at the heart of it, with many leading innovators being based here, including from our rapidly growing corporate membership.”
Regarding InsTech joining the event, Jay Weintraub, CEO and Co-Founder of InsureTech Connect, added: “We are very excited to have InsTech London as part of the World Tour. UK companies have always been innovators in insurance and that has not changed today. That spirit of early innovation is clearly in the DNA and continues to live on.”
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.