By FINTECH Books Contributor, Janthana Kaenprakhamroy
While technological advances are hugely exciting for insurance and may ultimately transform the industry behind the scenes, the real fuel firing InsurTech’s rise is its ability to make insurance work for consumers better than it ever has before.
In achieving this, some of the most promising technologies may not – yet – be quite ready to power the FinTech revolution, especially for young startups. To take three examples:
1. IoT has already had a major impact on the world of auto insurance, where it can personalise risk profiles and track incidents with tremendous precision. But does this mean that widespread adoption in InsurTech is imminent? Perhaps not: it thrives in niche markets, but may be prohibitively expensive for multi-product insurers in the medium term.
2. Blockchain promises a world of transparent and completely secure transactions. But like many emerging technologies, it remains fraught with uncertainty – not least the question, so crucial to insurers (and regulators), of how to ensure the security of customer details kept on a decentralised database. In addition, though it has huge strengths in back-end transactions and data storage, its benefits to the customer experience are, so far, perhaps not as clear cut.
3. For all AI’s recent headline-grabbing successes, formidable medium-term barriers remain to its adoption in InsurTech: it needs vast amounts of data to operate; it’s costly and time-consuming to build; and AI is still some way from simulating meaningful human interaction.To conclude, I’d reiterate that these technologies will surely be key to InsurTech’s future. But as we build up the industry, we mustn’t consider them as ends in themselves, but the means – along with partnerships and expertise – to transform the customer experience.