Due to the digital age, a lot of technology is used in the insurance industry nowadays. This technology is always upgrading, updating, evolving, and changing. Hence, these various insurance technologies are known as Insurtech. Insurtech could comprise and consist of any technology that an insurance company uses in order to increase its efficiency.
Fintech is any new technology that effectively enhances the operations being carried out in the finance industry hence making Insurtech a subdivision of it. Due to a wide variety, it is not possible to list down defining characteristics for this. Moreover, during its initial years from 2010-2019, a huge inflow of $16.5 billion was seen in startups of Insurtech in the insurance industry overall and several insurance companies in Pakistan are also applying it.
Examples of Insurtech
Due to the relatively new nature of Insurtech, the way it can be applied is constantly changing. One such example of Insurtech is chatbots and Smartphone applications. Through this, the backend process is enhanced as insurance companies are not required to hire extra employees in order to respond to customer queries, and instead, this can be done automatically by the chatbots at any time of the day or night.
Smartphone applications also lead to further enhancement of the process as people are not required to get into the hassle of printing out documents and other paperwork. Instead, they can simply take a picture and make the process faster, convenient, and more effective.
What Are The Types of Insurtech?
Various types of Insurtech that you may have been seeing employed around you, which will eventually evolve as well, are as follows:
1. Artificial Intelligence:
Artificial intelligence is associated with a type of software that performs and carries out tasks that are normally conducted by humans. So a chatbot falls under this category as it handles customer queries and concerns, a task that could be performed by employees of an insurance company.
2. Machine Learning:
Machine Learning is also under the umbrella of artificial intelligence. As the name suggests it incorporates making machines learn various algorithms over time in order to mimic the networks within the human brain. In these machines learn through raw data that is present instead of being fed certain instructions.
3. Smartphone Applications:
Through smartphone applications, insurance companies enhance the process for both the parties involved in the transaction. Either the customers or the businesses or both are facilitated through them.
Drones are also a type of Insurtech as they can be used to look into situations where it wouldn’t be possible for humans too. For example, a hazardous or dangerous property can be inspected by a drone which humans would be unable to do. Moreover, an accident between various vehicles can also be captured well through drones making the situation easier to assess for car insurance companies.
5. Internet of Things:
When machines such as televisions and refrigerators are connected to the internet, it is referred to as the internet of things. An example of the internet of things is telematics in which vehicles collect data and transmit it via electronic devices.