What is insurtech? And why is it growing so fast, attracting a record $5.3 billion in investment in the last quarter of 2021?
The simple answer: Insurtech is any new insurance technology that helps to uplevel aging systems and propel digital innovation. With insurtech, everyone — from underwriters to brokers to policyholders — immediately benefits. When an insurance company says it is adapting insurtech or a startup enters the insurtech market, they aim to create customer experiences that rival the best of retail. This could mean focusing on value (like Warby Parker), personalization (like Netflix), or efficiency (like Amazon).
The result of building a modern tech stack can include things like:
- Artificial intelligence that makes quoting faster
- Smart chatbots to handle routine inquiries
- Mobile technology to support filing notices of loss in real-time
From traditional insurance companies to spry upstarts, insurtech is already spurring huge changes wherever you turn — surprising some who viewed the industry as slow to change and evolve. But carriers and brokers now realize that insurtech holds the power to help them build lasting, more satisfying relationships with clients and policyholders – especially as the economy enters uncertain times. And they know how to do it while navigating complex regulations and maintaining the highest levels of financial ethics.
What is insurtech? It’s the best way to prepare for turns in the cycle and be ready for whatever comes your way. Who is engaging and investing in insurtech? Anyone who understands that staying one step ahead is no longer optional for truly competitive companies. Insurtech is now a must-have.
Focus your insurtech innovation with automation
Automation is the key to being a top performer in the insurance industry.
Why is insurtech important? It frees carriers and brokers to be more human
Insurance technology is the driving force for innovation in an industry with a reputation for loving paperwork – a barrier to reaching customers who are digital natives and impatient with anything that isn’t instantaneous.
You might think insurance isn’t fun — and we don’t blame you — but tech innovations can actually make some insurance interactions delightful. Verspieren, a major insurance broker, created a program allowing shoppers to instantly buy warranty insurance on their expensive purchases. That means near-instant quote-to-bind – just two minutes. And that’s digital innovation enabling simple, automated shopping experiences to give customers peace of mind, sans paperwork.
These moments are game-changing for the insurance industry. You can see why investors are so enthusiastic about insurtech. It can elevate service, streamline distribution, and collect data for sophisticated analysis. It’s the ultimate virtuous cycle – delight, collect data, and do even better the next time. And do it on any channel. Slack. Email. A phone call.
“We’ve built a holistic self-service experience, especially in our contact center where customers can do simple tasks,” said Stacey Goodman, chief information officer of Prudential Financial. “Additionally, we’ve built other capabilities around artificial intelligence, machine learning, natural language clouding, chatbots, and more to further our goal of being tech-forward.”
The benefits of insurtech: Orchestrating cross-channel communication
You don’t get to be as dominant after 150 years as Pacific Life has become without focusing on what’s coming next. Strictly speaking, Pacific Life isn’t an insurtech. But it is a company focused on digital-first strategies that foster innovation.
Like other long-lived competitors, insurtech is at the heart of Salesforce Trailblazer Pacific Life’s strategy. Indeed, 80% of insurance leaders say their business and technology strategies are inseparable. No surprise, then, that Pacific Life Chief Operating Officer Adrian Griggs focuses on upgrading the customer and broker experience through technology.
“We believe the next 10 years will see more change than the whole 150-year history of our company,” said Griggs. “The effective integration of channels across marketing, sales, and service activities is critical to delivering a positive, brand-reinforcing experience at every touchpoint in the customer relationship.”
Financial Services Cloud was Pacific Life’s tech of choice, with the goal of offering customers a retail-level experience. This enabled the carrier to work more effectively with independent agents and customers via a 360-degree view of their data. For example, using CRM Analytics, the carrier made data-driven decisions to determine the next-best actions with the support of AI and intelligent data visualization. Next up on its business plan: Connecting with customers and brokers on their preferred channels – email, chat, social, text, or phone.
Using insurtech to refresh a brand and appeal to younger customers
Salesforce Trailblazer AAA Carolinas needed a strategy to add some spice to attract the attention of millennials and Gen Z. The nonprofit has an array of services to offer drivers as they explore the world, but realized it needed to reach the next generation.
AAA Carolinas had built its business around services and products. Its leaders realized they needed to put the customer at the center of their efforts. To do that, AAA Carolinas introduced technology innovation that would put all customer data into one place so everyone in the organization could have a 360-degree view of its users. The new technology enabled the nonprofit to introduce LiveAgent, an automated chat, for online support. This helped to increase member engagement by 330% and reduce service response time by 54%.
AAA Carolinas also automated ways to flag new sales opportunities when members transferred from one region to the next. This generated around 1,250 new opportunities per month and is estimated to drive $99,000 to $200,000 in additional gross revenue annually. With the help of Salesforce Program Architects, who provide strategic planning, deep industry and product knowledge, and on-the-ground technical advice, AAA Carolinas electronically linked the organization to Edmunds, the car value database. Sales reps could spot potential safety issues for members and notify them of service needs.
Reducing first notice of loss by 75% with a new claims platform technology
Claims may be the most challenging area for carriers and brokers. If an individual or business is filing a claim, something has gone wrong for them. They don’t need cumbersome paperwork or clunky claims systems to make things feel worse.
Farmers Insurance used insurtech in its claims management system to create a platform reducing loss-reporting time from 12 minutes to 3 minutes. Policyholders can now file a claim on their computers or phones; send in photos; find repair shops, and connect quickly with an adjuster more efficiently than buying groceries. Farmer’s also uses new technology to automate routine tasks so agents can spend more time with customers.
Innovating insurance technology is no longer optional
According to Forrester, 83% of insurance sales will involve a digital component. That’s impossible to ignore. And 87% of insurers say they will be investing in digital enhancements. The innovations your competitors are undertaking mean that insurtech is now an imperative. As markets change and the economic outlook gets murkier, you need the right technology to create the best experiences possible for your policyholders and clients.
Salesforce offers a suite of solutions for every vertical of the insurance industry
Financial Services Cloud and complementary tools for carriers and brokers help deepen relationships with customers and policyholders while streamlining operations to save time and money.