Last editedNov 20222 min read
You’ve heard about fintech, but technology is being used to disrupt numerous industries, including insurance. Blending insurance with technology, Insurtech is a new buzzword describing the latest innovations. Is Insurtech part of fintech, and how does it work? We’ll explore these questions and more in this guide.
What is Insurtech?
Insurtech refers to insurance technology, or the use of specific innovations to make the insurance model more efficient. Using big data and smart devices, insurance companies can provide more personalized products to customers based on their real-time risk levels. Customized policies and smart contracts streamline the claims and payments process, with easier approval and more secure fraud mitigation tools.
With Insurtech tools, customers can access their insurance products from mobile apps and other smart devices. This field also includes wearable technology like smartwatches and fitness trackers, all of which contribute to greater product customization. For the insurance companies. Insurtech helps with processing claims and underwriting.
Is Insurtech part of fintech?
Yes, Insurtech is considered a subset of the larger fintech market. The term encompasses a variety of different technologies and applications, but the goals of both Insurtech and fintech are similar: to create new products that are easier to use and more competitive.
Insurance is a traditional business dealing with assigned risk. By its nature, it often results in some individuals paying more than they should to shoulder the cost of other insurance policy holders. Insurtech aims to level the playing field using a data-driven approach, creating a more convenient, consumer-friendly experience.
Some Insurtech applications are similar to those you’d see with other fintech companies.
Customer identity verification: Insurers can use tools like blockchain technology to store customer ID details securely.
Smart contracts: These allow insurers to authenticate and enforce documents automatically, making it faster to approve claims and pay-outs.
Fraud prevention: Automated applications help manage fraud and mitigate risk with digital scanning and automatic verifications of claims.
Payment processing: Like fintech, Insurtech helps process payments more efficiently once claims are approved.
What are the components of Insurtech?
You can break down Insurtech into two main categories:
Technologies used include things like artificial intelligence, machine learning, and the internet of things. These types of technology capture data for analysis through tools like AI-powered chatbots, wearable devices, or smart GPS trackers. Smartphone apps can be used to help streamline policies, while drone technology can be used to inspect property damage and transmit images back to the insurance company.
Insurtech solutions, on the other hand, describe how all this data is used by the insurance industry. For example, data solutions connect systems together, providing the architecture needed for users to access their most relevant data. Payment solutions enable customers to file claims and receive payments, as well as pay their insurance premiums more easily. Solutions also extend into generating policy quotes, which can traditionally be a lengthy and tedious process. With quote solutions, agents can upload relevant details into a central system.
What are the advantages of Insurtech?
The potential benefits for consumers are clear. Insurtech gives the average policy holder greater control over his or her own insurance. It also is more convenient with insurance products accessible through smartphone apps. Digitizing the process does away with time-consuming paperwork, and technology allows for a higher level of security.
For insurance companies, this technology also helps save time and money by reducing fraud. Built-in anti-money laundering checks and ID verification help weed out costly security issues. Automating claims and the payments process also reduces office admin and the chance for human errors.
When it comes to automating your insurance payments, GoCardless can help by enabling businesses to collect payments directly from customer bank accounts. Whether taking recurring premiums or one-off payments, it is both easy and cost effective. Insurance businesses retain control over incoming payments, with hosted checkout flows to easily sign up new customers. A central dashboard gives full visibility over payment statuses, but there’s also an easy-to-use API to integrate GoCardless with your own custom system.
Whether you’re shopping around for business insurance or looking for a way to provide better service to your customers, Insurtech has made the process more efficient.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.