InsurTech: The Advancements and the Downsides

FinTech is swiftly leaving its mark on the insurance industry, as insuring and being insured has never been cheaper or faster. It’s time to give way to InsurTech - the new era of insurance. 

As technology takes over the world, insurances refuse to be left behind. In order to adapt, old companies are developing new methods, and new companies are surfacing. These new methods contain technology such as AI, which can assess the needs of a customer and can suggest a plan accordingly. Products are also being offered to promote healthier lifestyles, subsequently reducing the cost of life insurance. As the name suggests, InsurTech is insurance fused with technology.

Advancements

One way that technology is revolutionizing insurance is with UAS’s, also known as drones. Major companies like State Farm and USAA are utilizing drones to assist underwriters when assessing claims filed by customers with increased speed. Additionally, drones can evaluate damage far better than pictures ever could, which gives the insurance provider all information needed to issue a settlement. This advancement is especially beneficial when assessing major damage, for example damage caused by catastrophic events like a hurricane or wildfire. The investment company Chubb utilizes UAS’s and thermal satellite imagery in order to quickly assess acres of damage, if necessary. 

Another way insurance is making use of technology is through products, such as health monitors and car monitors. Various insurance plans offer devices like health monitors, and based on the company / agency’s assessment of the results, a discount may be offered. This occurs because during an insurance agent’s underwriting, they look for minimal risk, and if the health device’s results deem the individual healthy, the insurance company has less risk when insuring you, leading to cheaper rates. Similarly, car monitors have the ability to lessen rates. When the monitor is put in your car, it will gather data on the driver’s driving habits, then it will analyze that data to help the insurance provider assess the risks in insuring you. Furthermore, monitors like these will also provide feedback on how to improve your lifestyle based on your results, which will not only reduce your insurance expenses, but improve your life as a whole. 

Downsides

As with any tech, there is a risk of the personal information for millions of customers to be breached. Hacking is a very unfortunate part of today’s world, however it is one of the biggest threats in the digital world. Additionally, insurance fraud is a colossal problem, as it has cost more than $80 billion. Although, to combat this, companies are promoting anti-fraud analytics, which works to further investigate the validity of insurance claims. 

What Does This Mean for the Future:

Insurance will continue to transition and adapt to the digital world. New technologies will spark innovations, which will further advance the insurance industry.