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Expert Opinion: Gido Van De Geest on InsurTech

Gido Van De Geest, Head of Operations at Elmore Insurance Brokers Limited, for The Fintech Times.

Insurers need to re-invent themselves both from a product and a distribution point of view to serve their commercial customers better. It needs to be much easier to buy a product, less data input requirements, more big data background analysis and customers should have continuous policies that adapt to the changes of the business to ensure continuous coverage, no more annual renewals. Companies expect a similar insurance purchase process as with their personal policies, make it convenient, competitive and most importantly respond immediately in the event of a claim and it will be a success.

TOP-3 the most crucial shifts for this year for the insurance industry?

  1. Several insurtechs (like Bought by Many, Digital Risk) have now come out of their labs into the real world, it’s very possible for a few to make an impact and take market share away from incumbents.
  2. GDPR – possibility for the first fines to be issued, which will test the cyber insurance policies and their coverage. Regarding cyber insurance I expect many companies to be underinsured for their exposure.
  3. Continuous low interest environment, coupled with high losses in prior years and excess capacity is resulting in margin pressure, possibly leading to further consolidation and insurers withdrawing from the market.

If we draw a parallel with the fintech industry, it seems it’s not the supportive solution providers that receive the biggest capital, it’s the challenger ones that need and receive the biggest amount of funding, and rightly so. The relationship-based insurance industry is changing to a more data driven, less face-to-face one, offering the right solution, at the right price (honour your existing customers) in an easy to use fashion, using the right language, wide range of distribution channels and style with a complete product offer will attract the interest from investors.

Besides all the well documented macro challenges (interest rates, regulation, margin pressure) traditional insurers are challenged by a significant amount of inflexibility (legacy systems), lack of trust and misunderstanding about the real needs of the customer. Pricing on policies is not transparent (renewal policies more expensive than 1st time purchases??), current application processes are alright, but then any changes to those result in needing to make phone calls and spend time answering numerous security questions and dealing with the various members in the call-centre.

I believe in the blockchain/smart contract type of solutions and would hope these will be mainstream in a few years, enabling a quick and efficient purchase process which will give both parties trust in each other and will eliminate unnecessary overhead from the process, lowering the premiums paid, claims costs, fraud and allows for continuous insurance cover, hallelujah!

Click here to read more about Insurtech: Reshaping the Insurance Industry.


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