Examining insurtech’s impact on the insurance industry and what it means
The rise of fintech/insurtech, changing consumer behavior, and advanced technologies are disrupting the insurance industry.
Over the past decade, the financial services industry has been transformed by a number of new technologies. Cloud computing, mobility and mobile apps, high-speed trading, data analytics, and more, along with specific financial technologies (fintech), enable banks and other institutions to offer new services and open new markets. This, in turn, encroaches upon the insurance industry, as financial institutions look to bundle insurance services with their other offerings.
The good news is that a majority many insurers recognize the potential disruption of fintech. A global survey by PwC found that 74% of respondents viewed fintech innovations as a potential challenge to the industry. The downside is that the same survey showed only 43% planned to use fintech in their operations, with 28% exploring a partnership with fintech companies.
Smart insurance companies recognize that disruptions caused by fintech represent an opportunity and not necessarily a challenge. They look to repurpose the emerging technologies of fintech into solutions—insurtech—that can meet the needs of the insurance industry. For example, insurers can use data analytics to study and forecast risks before creating policies. And they can move much of their operations to cloud-based services, which helps them save on infrastructure costs, and allow insurers to automate much of their operations and deploy self-service applications.
Changing customer expectations is also a key driver of changes in fintech/insurtech. Customers no longer want a “one-size-fits-all” policy. Each person is different and he or she has different expectations. Here, insurers have the opportunity to use the latest technology to create new personalized service offerings and products to meet customers’ changing expectations and the risks that come with them. Adding fintech/insurtech solutions into the mix will enable insurers to deliver high-quality experiences and provide insurers with more opportunities to engage their customers.
One area that’s captured insurers’ attention as a means to deliver better customer experiences is in the area of self-directed or self-service tools. With the widespread usage of smartphones and mobile apps, customers expect to be able to manage their accounts and policies online, securely, quickly, and transparently. In fact, in the PwC survey mentioned earlier, self-directed services ranked highest in industry trend importance and the most likely to be implemented by survey respondents. For insurers, designing and offering self-directed services can help them improve overall operational efficiency, acquire new customers, and creating new ways of reaching important demographic groups, like Millennials. The key, however, is that as self-directed services become more widespread, smart insurers will look for innovative new ways to use these services to separate themselves from the competition.
Take claims processing and payments, for example. When an auto accident occurs, policyholders want to get back in the driver’s seat as quickly as possible. However, paying those claims is not always a fast or straightforward process—checks take time to be delivered and often have to be signed by more than one party. Here, moving to a mobile epayment solution makes perfect sense. Customers can select the choice of vendor, payment type, and preferred payment method using their smartphones.
For insurers, an epayment solution can help streamline operations to reduce costs while improving customer interactions and experiences. epayment solutions allow insurers to pay claims according to customer preferences, whether by virtual card, electronic funds transfer, automated clearing house (ACH) payments, or even checks. Customers receive payments for their claims faster, which in turn, makes them happier.
To learn more about how VPay can offer you a Total Payment Solution that increases customer satisfaction and sets you apart from the competition download the white paper, Top Strategies for Auto Insurance CFOs: Modernizing Claim Payments.
Visit www.vpayusa.com or call 855-VPAY-USA to get started.