The insurance ecosystem is evolving rapidly, and with it, new trends are shaping the way agents and brokers engage with clients. Insurers can no longer lean on the past to enhance their reach.
Instead, they must embrace and cultivate innovations, mostly tech-led, to remain competitive. Throw in the challenges posed by the pandemic, and traditional operating models have morphed, driving insurance leaders to re-evaluate their core business.
According to the Africa & Middle East Embedded Insurance Business and Investment Opportunities - Q1 2022 Update, the insurance market is expected to grow regionally by 40.2 per cent on an annual basis from $2.32 billion) to $7.76 billion) by 2029. The trends are due in large part to insurtech and embedded insurance offerings.
Insurtech refers to any new technology introduced to insurance designed to improve the efficiency of the industry. It powers the creation, distribution, and administration of the insurance business. By leveraging AI, machine learning (MI), Internet of Things (IoT), apps and blockchain, agents and brokers will be able to streamline aspects of insurance that once took weeks to process.
Partnerships with insurers, insurtech, and technology providers are reshaping how clients receive insurance protection. According to the World InsurTech Report 2022, 67 per cent of insurers want to collaborate with insurtechs, and 85 per cent of insurtechs want to partner technology providers. Additionally, 83 per cent of insurtechs want to collaborate with insurers.
Forward-thinking insurers are reimagining the role of technology in collaboration with other business functions. To remain competitive, they are looking to reinvent ways tech delivers products and services to end-users while future-proofing the quality and scalability of the existing systems.
Leveraging new insurance solutions, insurers will be able to offer clients:
- Quick and efficient insurance quote portals that provide access to the best coverage to meet lifestyle and budgets;
- Easy-to-use apps to submit claims (such as using a smartphone to file an auto claim); and
- Intelligent solutions to quickly and efficiently process claims for accurate and timely payouts.
Embedded insurance (EI) offerings have the potential to rejuvenate the industry’s business model. It empowers businesses with real-time bundling and sale of insurance coverage or protection while a consumer is purchasing a product or service, bringing the coverage directly to the consumer at the point of sale.
It opens up the market to the underinsured/uninsured and protects individuals who don’t want to buy insurance. EI also allows non-insurance brands of all sizes to incorporate ‘peace of mind’ into their brand proposition. In fact, over the next decade, there is an opportunity to close the $5 trillion insurance risk gap globally, and for this to be done, non-insurance companies have to take part.
While collaboration between established insurers and tech startups is in its infancy, there are examples of UAE insurers and insurtech companies working together for the benefit of consumers. From embedded insurance options and easy-to-use insurance quote portals that allow you to compare hundreds of policies within minutes, the future of insurance is all about streamlined efficiencies, quick access to quotes, easy access to claims filing, and so much more.
It’s an interesting time to be in this space, whether you are an insurer, customer, intermediary, or insurtech player.