Technological developers or players
are venturing into insurance industry to furnish the industry with disruptive
and innovative solutions. Fintech has been witnessing a similar trend.
Digitization of operations and offering services through digital channel is one
the key aspects of the fintech. However, the trend is changing at a swift pace,
with technology developers not only focusing on the target customers but also
competing with traditional banks for their share. As a result, traditional
banks or incumbents are engaging in one form of partnership or other with the
technology giants to retain their share in the market. Traditional insurance
industry is also at the cusp of similar change with insurtech.
What is Insurance Technology?
Traditional insurers have started
noticing new technologies that are transforming the lives of their customers.
Breakthrough of new technologies such as Big Data, Artificial Intelligence and Internet
of Things and emergence of technology-led new entrants are stressing on the
need to reinvent themselves. Just like fintech, insurtech is a combination of words,
insurance and technology, which refers to the implementation of innovative
technologies in helping to reduce the cost for consumers and insurers, while
improving efficiency and enhancing customer satisfaction. Earlier, these
changes or innovations were only visible to insurance providers as they were
working in the backend. Thanks to experiments by insurers with chatbots, application
and other tools, these changes are visible to customers as well.
According to TechSci Research report
“Global Insurtech Market By Technology (Cloud
Computing, Big data & Analytics, Blockchain, Artificial Intelligence,
Internet of Things, Others), By Deployment Mode (Cloud and On-premises), By
Insurance Type (Commercial Insurance, P&C Insurance, Others), By Region,
Competition, Forecast & Opportunities, 2024”, the global insurtech market is
anticipated to grow at CAGR of over 30% during the forecast period. The funding
for insurtech reached figure of USD 3 Billion in the first two quarters of 2019
and is forecast to surpass USD 5 Billion by the end of the year. Factors, such
as personalized product offerings by analyzing data, improved functionality of
payment and risk assessment, among others are anticipated to drive the growth of
insurtech market, globally. Insurance industry is currently facing the
challenge of managing large amount of data, therefore, there is urgent need for
adopting digital technologies which not only helps to optimize the work and
price of the target product but also in monitoring data.
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What all technologies are involved in
Insurtech?
Insurtech or technology-driven
insurer is implementing plethora of technologies to improve customer engagement
and provide faster service. Some of the major technologies used by them
include:
Artificial intelligence (AI) in
Insurtech:
From Alexa, Siri to chatbots,
artificial intelligence or AI has moved out of research labs and become a
house-hold technology. Combination of machine learning and natural language
processing (NLP), which are two branches of AI can be used to interact with
human users and improve the capability of devices. One of the major
implementations of above-mentioned technology is chatbots. Modern day insurance
providers are readily adopting and implementing this technology as these bots
are available 24x7 and provide answers to the queries in real-time.
Internet of Things in Insurtech:
Internet of things or IoT refers to
collection and sharing of information with connected devices in real-time.
Several industries are already utilizing IoT and insurance industry is no
different.
