March at The Fintech Times is all about insurtech and its many facets. With the industry making leaps and bounds over the past few years, insurtechs are providing the much-needed disruption of the traditionally viewed, and sometimes outdated insurance industry. From innovations in technology and applications to key industries like property, auto and energy, this month we’ll be taking a look at some of the key topics in the sector and how insurance really is the one to watch.
With this in mind, we have spoken to some of the leading players in the industry to uncover how insurtech is evolving into an experience-based industry, and learn more about the impact on automation.
Paula Coulthard, insurance director at Marshmallow, comments: “The first car insurance policy was sold in 1904, and since then, society, and the auto industry, has changed significantly. With many more options available since then, consumers can now shop around to find a policy that suits their lifestyle needs – whether that’s flexibility or environmental consciousness.
“For those wanting flexibility, pay-as-you-go insurance has shot in popularity in the past few years. Using telematics technology, insurers can see how often a driver uses their vehicle, and in response, provide a price that matches the usage.
“After the pandemic, options like these may become more popular to give drivers more flexibility in their cover should another drastic change in lifestyle happen again.
“Looking ahead, the next significant milestone will be the mainstream adoption of autonomous vehicles. Of course, there is still a way to go, but it’ll be interesting to see how the insurance industry treats driverless cars on the road. The debate currently is centred around whether autonomous vehicles will fall under a motor insurance policy, or instead, a product guarantee if something goes wrong.
“This is something we’re keeping an eye on. There’s no denying that the auto industry has changed dramatically since that first policy was sold in 1904. Still, thanks to technology, insurers companies can now start to keep up and provide policies in line with innovation.”
Mark McDonald, head of insurtech strategy at Altus, said: “The mandatory requirement of motor insurance puts pressure on insurers to attract and retain customers, on what can be seen as a ‘grudge’ purchase. To date, this has generally been through price and a ‘race to the bottom’.
“Clearly, this approach can’t continue, particularly with recent UK legislation, and we are starting to see Insurers implementing innovative ways to engage customers.
“In the UK, Insurtech Wrisk has partnered with BMW to revamp the brand’s insurance offering moving away from a traditional annual model, as well as administering RAC’s pay-by-mile policy.
“And it’s not just insurtechs, in the US, it was recently announced that 100-year old insurer State Farm has partnered with Ford to use connected car data in a telematics product – no box or app needed.
“When it comes to connected cars, Elon Musk publicly states he can deliver insurance savings for drivers by using Tesla vehicle data.
“This may be great marketing, but there’s undoubtedly truth in this, given the wealth of data captured by Tesla cars. Relevant and timely data is certainly key to providing valuable insight to a new wave of Insurance products.
“And what about claims? Insurtechs have hugely benefited the auto industry with wide-ranging solutions to support customers, including auto-FNOL from telematics and ADAS connections, through to damage assessment using AI, speeding up the process of repair and getting customers back on the road quickly.
“Finally, there are changes happening in distribution and proposition – embedding insurance in a fixed monthly car lease. Jaguar Land Rover is trying this at the top end of the UK market, and in a similar vein, start-up Onto has launched an all-in monthly subscription package for the rapidly expanding EV market.
“Couple these models with the short-term motor products from insurtechs like ByMiles and Cuvva and we see some real disruption to the traditional, annual premium-driven motor insurance market.”
Sarah Larner, EVP of strategy and innovation at wejo, added: “Increasing vehicle connectivity and driver assistance that take us towards autonomous vehicles will drive a fundamental shift for future auto insurance, not least how insurance will be determined and liability applied for fully autonomous vehicles where there is no human driver who could have been responsible for a crash.
“However, we see huge gains to be made right now in insurance, leveraging digital transformation and access to data and insights to enhance the customer journey. Connected vehicle data may impact underwriting and pricing, fraud and claims management, as well as enable more proactive, relevant engagement with the policyholders, particularly should an incident occur.
“Wejo enables a safer, smarter, sustainable mobility experience, and insurance will remain a critical component of the journeys we make.”
