The Rise of Insurtech in the Age of Algorithms

The Rise of Insurtech in the Age of Algorithms

The Rise of Insurtech in the Age of Algorithms

Titled ‘Data Science for Banking & Insurance’, Dataiku’s free eBook includes recommendations, use cases, testimonials, and how-to checklists that enable you to make your mark in this new era of Fintech and Insurtech. Whether you are working in marketing, risk management, product design, finance, actuarial science, underwriting, or claim management, this ebook illustrates how banking and insurance can seize the analytics opportunity. Get your free copy here.

In the internet era, giants of the digital age like Google, Apple, Facebook, and Amazon (GAFA) in Western markets and Chinese powerhouses like Baidu, Alibaba, Tencent, and Xiaomi (BATX) in Eastern markets have been increasingly straying away from their bread-and-butter products and testing the waters in large, established industries like banking. GAFA and BATX are beginning to offer services like online and mobile payments, money transfers, personal lending, account and savings management, peer-to-peer lending (crowdfunding), and currency trading.

And it’s not only the tech giants that are moving in. Countless startups in financial services have also been flooding the space and gobbling up market share, cherry picking high-volume services tailor-made for the online and mobile world into which they were born. Though large banks recovered from the global financial crisis of the early 2000s to continue to serve customers, they quickly started to lose ground as those customers turned to faster, more cutting-edge solutions to meet their financial needs.

Read Also:
Machine Learning in Education Opens a World of New Possibilities

Unlike the banking industry, GAFA and BATX have not made direct forays into insurance, though the number of Iinsurtech startups in this space is on the rise. The market is ripe, as younger generations are used to ease of mobile apps and one-click shopping, and they want the same with insurance; they are not interested in the heavy process and expense associated with traditional insurance.

As in banking, peer-to-peer is hot in insurance with older players like Friendsurance and also newcomers such as Lemonade, InsPeer, InSured, and Teambrella. Each promises insurance that is more transparent and social with shared costs – things that have wide appeal in today’s market where customization is king.

Another interesting area in insurtech is item-specific, event-specific, and on-demand coverage – “smart insurance.” Startups in this space collect data about a customer’s possessions and provide machine-learning enhanced risk pricing for single-item coverage of any duration. This model allows premium levels to scale down to pennies with durations down to the second for completely customized coverage.

Read Also:
Everything Publishers Need to Know About Business Intelligence

Aside from insurtech startups, the Internet of Things (IoT) is also poised to change the insurance industry in the coming months. Though IoT has been around since the 1970s, it has only recently started to infiltrate all aspects of consumers’ lives. Billions of sensors, computer processors, and communication devices are being embedded in or attached to every kind of ordinary thing imaginable, from watches to agriculture crops to cars.

And we’ve just begun to scratch the surface; Gartner estimates that by 2020, there will be more than 21 billion connected devices. Considering there were only around 3.5 billion smartphones in the world in 2015, this is astronomical growth.

Currently, the manufacturing, healthcare, retail, and security industries lead in the IoT sector, but insurance companies are well positioned to take advantage of this space. Given the upcoming ubiquity of smart homes and cars (like Nest and any number of the developing self-driving cars), a new generation of products based on real-time monitoring, collection, and analysis of data coming out of these products is on the horizon.

Read Also:
Machine Learning Is Becoming A Growth Catalyst In The Enterprise

 



Chief Analytics Officer Europe

25
Apr
2017
Chief Analytics Officer Europe

15% off with code 7WDCAO17

Read Also:
The Much-Needed Business Facet for Modern Data Integration

Chief Analytics Officer Spring 2017

2
May
2017
Chief Analytics Officer Spring 2017

15% off with code MP15

Read Also:
The Smart City – What is it and where is it going?

Big Data and Analytics for Healthcare Philadelphia

17
May
2017
Big Data and Analytics for Healthcare Philadelphia

$200 off with code DATA200

Read Also:
The Top 10 Achievements of a Year-One CDO

SMX London

23
May
2017
SMX London

10% off with code 7WDATASMX

Read Also:
The Top 10 Achievements of a Year-One CDO

Data Science Congress 2017

5
Jun
2017
Data Science Congress 2017

20% off with code 7wdata_DSC2017

Read Also:
HPE Haven OnDemand and Microsoft Azure Machine Learning

Leave a Reply

Your email address will not be published. Required fields are marked *