Insurance companies have been around for hundreds of years and are highly regulated; these regulatory barriers limited competition to some extent, and because of this, there was no immediate imperative to modernize technology. Insurance companies that have been around for a long time have technology that is old, otherwise known as Legacy Technology. Agents and some carriers began to look for ways to be more efficient and help grow their business using ideas that were outside of the box.
The concept of the evolving technology in the insurance space through the use of innovation has been around for a very long time. A specific way of doing just that caught its name about 10 years ago and has become a buzzword in recent years, insurtech. The idea of insurtech was born and the insurance industry has never looked back.
So how is an insurance company and an insurtech different? Well, many insurtechs don’t actually write insurance: they provide solutions to insurance companies to better write policies, but don’t necessarily sell the insurance.
Insurtech is designed to assist insurance companies in their selling. While traditional insurance agencies are burdened with legacy technology and legacy thinking, companies like Tarmika work with them to help get things done more efficiently. One insurance company could take 18 months to roll out a new product, an insurtech company could help drive down that time.
There are also thousands of insurtech companies and they aren’t all the same. Some play in the same space and some have similar concepts, but are not directly competing against each other. There are insurtechs designed for billing, claims, rating/underwriting, etc. Essentially, an insurtech’s goal is to increase efficiency by developing products that streamline processes in an outdated industry. While each insurtech is unique and has their own specific set of goals, they all boil down to one thing: they use technology to solve problems.
An insurtech is just like any other company – it has sales, marketing, technology, customer service, accounting, finance, human resources, etc. The company may have a heavier focus on departments such as engineering, product development, project management, and IT architects.
Anyone can work for an insurtech, as long as they have an open mind and like to think outside the box! So who do these departments work with? Well, the possibilities are somewhat endless. Depending on what variation of insurtech the company is, they could work with insurance carriers, insurance agencies, home monitoring systems, agents, business owners, and even other insurtech companies.
Each insurtech aims to solve a different problem within the insurance industry. The overall goal of insurtech as a whole is to increase efficiencies for insurance companies and independent agencies while creating a better user experience for consumers.
So why should someone who doesn’t work in insurance care about insurtech? Almost everyone needs some form of insurance, whether it’s personal or commercial, and each individual expects the best level of service provided by their insurance agent.
To recap everything, insurtechs are technology companies focused on helping insurance companies and independent agencies with digital transformation. It has come to represent a new breed of insurance companies that use modern technology and offer insurance products to consumers where and how they want to buy it.
Insurtech is a combination of traditional insurance processes and the direction the industry should be moving toward. The growth for this industry is exponential; this decade is going to see more strategic growth. Insurance companies are not randomly trying new technology for the sake of trying technology; they are supporting the companies that help them expand distribution, pay claims faster, and reduce claims and operating expenses.