Fintech & Insurtech 02.11.22

The Biggest InsurTech Trends To Watch In 2022

The InsurTech sector is continuing to grow at lightning speed. In 2021 the industry set a new annual funding record at $13.4bn - almost double the $7bn that was invested in 2020.

The Biggest InsurTech Trends To Watch In 2022

The InsurTech sector is continuing to grow at lightning speed.

In 2021 the industry set a new annual funding record at $13.4bn - almost double the $7bn that was invested in 2020.

The sector is showing no signs of slowing down in 2022, either. The first quarter of this year has already seen the highest ever participation of early-stage investment, with around $2.2bn invested into InsurTech businesses globally.

Many of the biggest players emerging in the market are heavily focused on new tech solutions, meaning the lines between ‘insurance’ and ‘technology’ are blurring.

Andrew Johnston (Global Head of InsurTech at Gallagher Re) has stated that “since almost all new ideas and entrants now have a technological angle, it becomes harder to separate the two.”

The increased investment and interest in the InsurTech sector are helping to fuel global innovation. Businesses are actively seeking to create unique products that will help them to stand out in a competitive marketplace, and this is opening up new opportunities in the industry.

Let’s take a look at some of the most innovative trends emerging in InsurTech, and identify a few of the key companies driving this innovation.

Creating bespoke customer solutions

Advanced technology and data access are allowing insurance companies to create more specific and personalised products for customers.

The result is that modern consumers are now expecting more from their insurance providers.

Customers are keen to receive real-time customer support, tailored insurance packages, and on-demand services.

ManyPets is a pet insurance business that uses aggregated customer data to identify opportunities for new products.

Rather than making assumptions about the insurance needs of pet owners, ManyPets collects insights from thousands of customers to inform and improve its offering.

This is a great example of an InsurTech business focusing primarily on customer needs and building solutions to meet them, rather than the other way around.

Cuvva is another insurance company committed to delivering customer-centric solutions.

The business offers a range of flexible car insurance options, from one-off cover to rolling monthly packages. Customer support is available from 6am to 1am, policies can be cancelled free of charge, and there are no lengthy commitments required.

All of these features have been designed with customer convenience in mind, providing consumers with stress-free insurance that’s tailored to their requirements.

Utilising AI & Machine Learning

AI and Machine Learning are transforming the InsurTech landscape.

Automated solutions are helping insurers drastically improve their efficiency and enhance their customer services.

AI isn’t just helping businesses to manage existing products - it’s also helping them to identify brand new opportunities.

Lemonade is using AI technology and anti-fraud algorithms to analyse and manage new claims automatically. Machine learning has enabled the company to process 30% of claims instantly, and handle the majority of requests in seconds.

Injecting machine automation into the claims process has allowed Lemonade to deliver an incredibly high (and consistent) level of customer service.

InsurTech brand Tractable achieved unicorn status in 2021 and aims to help more insurers take advantage of AI-powered solutions.

This kind of AI technology is being rapidly adopted by insurance companies, and soon, the vast majority of claims may be processed and verified by automated systems.

Managing the impact of climate change

Climate change is having a huge impact on the world of insurance, and this isn’t likely to change in the near future.

More and more consumers are at risk of suffering from natural disasters and adverse weather, and the majority of traditional insurance packages aren’t equipped to deal with these emergencies.

So how are InsurTech brands adapting their offering to handle turbulent weather conditions and natural disasters?

HazardHub maintains a colossal property risk database, providing national coverage for risks including tornados, floods, wildfires and earthquakes.

The business employs a team of scientists to keep this database updated, and works alongside 100+ insurance businesses to help them manage risks and create more tailored products.

Concirrus is another example of an innovative InsurTech brand. The business allows insurers to process claims quickly and accurately after catastrophic weather events by providing them with detailed satellite and aerial imagery.

In the flood cover category, FloodFlash enables customers to use mobile-connected sensor technology that removes uncertainty and guesswork from the claims process.

Insurers have historically struggled to assess the cover required for potential flood damage due to the number of variables involved - higher premiums are often charged to compensate for this. FloodFlash uses its technology to build more accurate policies that are based on meter readings rather than estimates.

Identifying emerging cyber risks

Cyber threats are continuing to develop and emerge over time, and these risks often present entirely new challenges to insurance companies.

InsurTech businesses are playing a vital role in developing new technologies that can keep cyber insurers ahead of the curve.

KYND has developed a product that can instantly identify and assess cyber risk exposure to inform better underwriting decisions. But this solution isn’t just useful in the short term - it can also monitor ongoing risks to ensure that customers remain fully covered and protected.

This kind of agile insurance is absolutely critical when it comes to cyber risk because potential threats are constantly evolving.

InsurTech has proven to be an incredibly inventive sector, with both established businesses and emerging start-ups looking to develop industry-leading products.

The increasing amount of investment being generated will undoubtedly help to accelerate the growth of the sector and fuel new solutions, technologies and services.

2022 will be an extremely important year for InsurTech businesses, and with absolutely no sign of industry momentum slowing down, there is massive innovation potential here.

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