Insurtech: a ‘good’ distraction
Although the term ‘insurtech’ can be a bit of a distraction, it is clear that all aspects of insurance will be fundamentally impacted by developments in data and analytics that improve decision-making, and by the technology that makes it all happen smoothly.
That is how Matthew Grant, executive director of Abernite, a company that helps companies develop and execute strategies around data, analytics and technology, describes the impact he believes insurtech will have on the industry.
His advice to new entrants in this space is to spend time understanding what problems and opportunities insurers have, and work hard to come up with a reason their new technology will solve the problems, generate new income or reduce costs.
His advice to insurers is very similar. “Understand what problems you are trying to solve, then look for the companies that have a clear proposition for solving them. Select your partners then manage up, down and across your organisation to make your partnership successful,” he said.
When developing new products, it is important they are in areas where there are real opportunities for growth. “Cyber is the most obvious example, because of the major amounts of uninsured risk—although rates are already declining, so in the short term it may be less appealing,” Grant said.
“It’s really important that the data can be used with analytical tools that improve decision-making. Insights without clear actions tend to be a waste of time.”
He believes that some of the innovation emerging could be used to close the protection gap, but he notes that this represents both an opportunity and a challenge.
“It is an opportunity because finding a way to credibly analyse and then price types of risk that hasn’t been possible before should open up a vast new market with little or no competition.
“It’s a challenge because so far the insurance industry hasn’t found a way to profitably write in areas where there are gaps. Governments offer cheaper alternatives, or people don’t understand the level of risk and so don’t bother to insure,” he concluded.
