To make the most of InsurTech, brokers must adapt to the benefits of connected channels and the data received within them.
Insurers require data in real time in order to better price and rate the risks. New sources of data such as smartphone apps, Internet of Things and Connected Homes could possibly replace traditional underwriting data that has been relied upon for many years.
To this trend, Pay-As-You-Go insurance such as auto insurance policies that change rates depending on the number of miles and/or way driven should be rapidly adapted. This form of InsurTech has several benefits, including; a discount on the insurance, lower travel costs and encourages consumers to drive less, which contributes positively to the environment. There are a growing number of user cases for Pay-As-You-Go insurance including insurance for the sharing economy and specific activity insurance allowing individuals to cover any one particular activity they are undertaking rather than for a whole trip which opens up coverage for domestic type activities currently with a very low penetration rate. These emerging trends will continue to challenge the distribution models of brokers and insurers alike, but as consumer activity adapts to new technological offering we expect opportunities to open for new entrants to capture market share.
SIMON GILBERT, Founder and Managing Director,