A new study by Conning finds that technology-focused investments are expediting business model changes across industries, and insurance is ripe for change.
The Conning study, «Emerging Business Models in Personal Lines Insurance: Innovation-Based Disruption» examines the changes that are underway in personal lines and the potential impacts on the insurance business model, focusing on product development, client acquisition, risk analysis, and claims.
With insurtech attacking all components of the traditional insurance value chain, the study identifies a number of near-term possible outcomes and business model changes for the industry.
Ubiquitous Artificial Intelligence
Insurtech investments are attacking different links in the personal lines insurance value chain, including product development, client acquisition, underwriting, and claims,
«Innovative technologies are targeting different segments of the personal insurance business system.» «The technologies are rooted in mobile and digital but include a wide range of categories, with fundamental changes in communication, data availability, and computation,» said Alan Dobbins, a Director, Insurance Research at Conning.
«Underlying these changes are several critical enabling technologies, from connectivity to analytics to artificial intelligence,» added Dobbins.
Significant Restructuring On The Way
Digital capabilities and the arrival of new competitors carving off pieces of the insurance value chain may well drive a significant restructuring of the industry.
For personal lines insurers, the key will be trying to figure out which parts of this evolving system are areas where you provide the most value and how you are going to connect to the customer.
Asia Will Lead
Global law firm Baker McKenzie expects to see a jump in potential acquisitions and joint ventures between large insurance players and tech start-ups in Asia.
The ever increasing pressure on margins means insurance companies need to join and utilise the insurtech innovations to stay a relevant player in the game.
Asia Pacific-based insurance companies, from established players to new entrants, are increasingly looking to acquire or partner with non-insurance tech players to understand and harness the new opportunities that insurtech can unearth.
