You can’t pick up a trade publication nowadays without news of some new insurtech start-up or investment being announced somewhere up-top. For the past couple of years, the leading trade magazines have had entire sections devoted to insurtech, such is the steady flow of news in the sector.
So you could be forgiven for thinking that “the only way is insurtech”, but is that true?
At Arun Bay, we’re certain that insurtech has a significant role to play in the future of insurance and, in time, perhaps even the leading role. However, what you’ll find us talking about more often than not are the “principles behind insurtech” as we don’t believe it’s an elite club of which you’re either a member or you’re not.
Make sure it’s right for you
If you define insurtech as being “the application of technology and innovation to drive savings and efficiency”, it’s quite clear that you can apply its principles to many aspects of most types of insurance business. It doesn’t mean that you need to go out and invest in a bank of R programmers, but it could mean that you become more aware of and responsive to the world of analytics, for example, and how looking at clusters of data to spot trends could benefit your own business.
If an insurer on your panel is talking about the analytics or data enrichment to help drive more accurate pricing they’re investing in, for example, you should be aware of what they are talking about specifically. You can then look into whether it’s worth you carrying out a similar exercise on lines across your own business, regardless of insurer. In a world of diminishing margins and reducing customer loyalty, spotting trends and identifying your champion (and your least profitable) clients or customers will help you target your efforts much more efficiently.
That analysis can be as simple as looking at in-year profit or retention by a number of single-dimensional factors or, if you can, to run various factors together to create some multivariate analysis. All of that can be done with Excel or some other simple spreadsheet program.
Starting with the basics
I have seen businesses run even the most basic analysis and being surprised by the outcomes. In most cases it meant potentially letting-go of clients that actually lost money for the business, but in all cases it meant that the business was able to focus its limited resources more precisely on winning more profitable profiles, and on retaining those customers who bring the most profit year-on-year. It’s transformed marketing campaigns, made previously unattractive distribution channels much more appealing and given the lie to what were thought to be cash cows that were actually a drain on the business.
Adopting the principles of insurtech opens your mind to the most basic of actions, but also then hints at the “art of the possible” once you’ve seen how it can help focus attention on what really matters to a business.
It’s then up to you as to how far you take it and how much you choose to invest, and Arun Bay can be there every step of the way to help.