Partnerships between insurers and insurtechs are becoming more commonplace. Insurance industry leaders and insurtech executives polled in a recent Capgemini and Efma report revealed that there’s a widespread belief tech-based solutions will revolutionize the customer experience while creating efficiencies and new business models.
It’s a stark contrast to the value proposition of many insurtechs when they first burst on to the insurance scene.
“One of the biggest transformations is that the initial rush was just for the distribution – changing distribution models and disrupting the way that leads flow into and out of agencies and brokers,” said Laird Rixford, CEO at Insurance Technologies Corporation (ITC), speaking with Insurance Business during InsureTech Connect in Las Vegas. “What’s happening now is it’s switching to more claims-based [solutions] and trying to improve the insurance product, and that’s the biggest difference that I see.”
Instead of trying to get rid of agents and brokers, Rixford points out that many vendors at the insurtech event were focused on bettering the industry by focusing on the claims process and improving the ability of insurance companies to assess risks as well as monitor losses. Putting the customer at the center of these changes hasn’t happened by accident.
“These technologies that are enabling not only carriers, but agents and brokers to better serve their clients are really meeting the demand that consumers are now placing on any technology platform,” said Rixford, adding that insurtechs are also introducing much-needed new perspectives to legacy systems.
“It’s bringing in a lot of younger blood and it’s a lot less about finding ways to replace the old people. It’s more about ways that they’re coming in with fresh eyes, they give new perspectives, and you’re still buoyed by regulations and history, and everything that this centuries-old business is all about.”
Machine learning is one major innovation that’s changing claims by helping companies to avoid human error.
“There can be a really good claims adjustor – they’re fantastic, they do their job great. They’re sick one day, they retire, or they’re having a bad day and they forget [something]. Whenever you’re dealing with neural nets and machine learning, it never forgets. It’s always learning and it’s always remembering everything that it had before,” said Rixford. “Whenever you have these algorithms that make sure that you understand the losses and that you’d better prevent them, and you can properly pay them out and make the process seamless and easy, that’s powerful.”
Instead of an agent having to follow a claim for a customer and dealing with the minutiae of calling carriers to get status updates, an app can now notify that insured about their claim, giving back time to brokers and agents to build relationships with their clients – a critical task in a referral-based business.
“Those technologies enable them to better support their customers and in turn spend more time on the relationship with the customer,” said Rixford. “Whenever you have more time to develop and hold a relationship with your consumer, and not have to worry about all the side stuff, that’s where it’s powerful.”