In the first half of 2019, investments in the InsurTech space reached $2.2 billion — and with just a few weeks left in the year, trends predict the sector will surpass the record set in 2015 when $3 billion was invested into the industry, says research from Deloitte.

With rapid expansion occurring in the tech space, the rest of the industry needs to stay in touch with key trends.

A new report from QBE North America, in partnership with Village Capital, outlines the movements happening in the InsurTech space.

"Insurance has shaped patterns of economic and social growth since its inception," said Allie Burns, CEO of Village Capital, in a statement. "Insurance technologies are fueling the emergence of affordable, accessible, and customizable solutions and enabling consumers, companies, and communities to create a more resilient future. We are thrilled to partner with the QBE Foundation to dive into this exciting topic."

Transforming the industry

The emergence of new technologies has redefined the insurance industry, from how consumers perceive it to increasing affordability and accessibility, says the "Impact InsurTech" report. It is also altering the way real-time and predictive data is captured and used to develop new products in response to emerging risks that also allows for customizable coverage and pricing. According to the report, Insurtechs' impact on the insurance industry can be divided into three themes.

Insurance for all. InsurTechs have undoubtedly improved processes and operational efficiencies, in addition to delivering much-need data to help reduce barriers customers face when seeking tailored insurance coverage. This change has been especially valuable when it comes to underserved customers, such as small businesses.
From society-shaping insurance to insurance-shaping society. Improved data and greater transparency have changed policyholders' behavior and knowledge positively. Technologies such as wearables and vehicle telematics have helped shift actions, thus, better mitigating risks and insurance claims.
Micro-transformation to meet macro-risks. There are two ends to the Insurtech spectrum, says the report. On one end is the emergence of millions of new sources for predictive data inputs and processing tools, which allow for tailored coverage and pricing; the other end of the spectrum includes broader, wide-spread trends, such as climate change and cyber risks. "Some of the most promising and high-impact use cases of InsurTech are emerging from the intersections of these two scales of activity," the report explains.

"These findings unequivocally demonstrate why we need to remain resolute in our devotion to advanced innovation, and QBE was pleased to sponsor this important research," Ted Stuckey, managing director of QBE Ventures, the venture capital arm of QBE Insurance Group, said in a release. "We are committed to fostering the development of industry-changing ideas. Delving deeply into the state of the InsurTech space is critical to building a more customer-focused, sustainable industry — which is good for all of us."

Other highlights from the report include:

Eight out of ten insurance executives stated that artificial intelligence would revolutionize their firm's production and delivery of services.
Around 37%-56% of InsurTech startups focus on improving the distribution channel.
Nearly three-fourths of consumers find insurance jargon confusing; however, InsurTechs are making products and policies more straightforward for consumers to understand.

Read the full report, "Impact InsurTech," on Village Capital's website.

Related:

Special Reports /

The three ways InsurTechs are impacting the insurance industry

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