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Insurtech was already a steadily growing sector within the larger tech, startup and fintech spheres when Covid-19 made landfall, catalysed cross-industrial digitization and accelerated the boom. This growth has been marked by the rise of insurtech giants such as Wefox and Zego, both with recent valuations above $1 billion (making the latter the U.K.’s first insurtech unicorn).
So, what exactly is driving this insurtech surge, and how can companies and entrepreneurs in the space be successful? The insurance industry has long been perceived as boring, staid and adversarial, and is thus in need of an all-encompassing root-and-branch revolution. This change — the need for it and enactment of it — was expedited by the ongoing Covid-19 pandemic, which has underscored how important it is for financial organisations to offer lasting, digitally integrated value to users to safeguard their long-term wellbeing.
Building Bridges Between Different Industries
One of the best attributes of insurtech is the ability to find practical connections between industries that have historically operated according to siloed, vertically constricted data. Take health and wellness, for instance. Insurers are positioned to incentivize consumers to improve their wellbeing by reducing costs and offering lower premiums in exchange for completing healthy activities. And beyond individual use cases, businesses can also adopt this approach by acquiring insurance policies for their staff at a lower overall cost. The field of health and wellness is just the beginning.
Insurance is, at its core, a financial product. But there is no natural symbiotic mechanism that connects personal finance to healthy living — the world of banking, loans and mortgages is hardly commonly associated with wellness. But by harnessing their capabilities and technology to improve all aspects of a policyholder’s wellbeing, in ways that can actually make a difference in users’ day-to-day health, insurtechs can change this relationship.
This intersection can best be summarised by the term “wellbeing.” An individual’s holistic wellbeing is not just determined by physical and mental factors but by financial stability, too. Insurtechs are uniquely positioned to map and connect various wellbeing services and provisions, and the products being built to do so should demonstrate the across-the-board impact that tech-driven lifestyle tools can have.
Insurtech And Business: A Symbiotic Relationship
Insurtech can also look to give companies and their employees the best value for their money to keep ahead of other insurance entities. Particularly when it comes to departmental budget planning, let employers know that they don’t have to budget separately for insurance and for employee wellbeing. With an insurtech service, they can provide both.
Tech plays a key role in enhancing corporate efficiency. Insurtech providers can add an AI-powered capability to provide a data-based understanding of employees’ wellbeing needs and habits. In my opinion, it’s in the best interest of insurtechs to help organisations bridge gaps and identify new opportunities in their wellbeing strategies.
Today’s Tech: The Key Differentiator
Savvy tech also allows for some of these processes to be gamified, which replicates the thrill of a game and channels it into wellbeing activities (for example, encouraging policyholders to “level up” and elevate their health and wellness routines in exchange for greater rewards like lower premiums or vouchers).
Insurance innovation must be driven by an ecosystem approach, one that not only taps into the power of AI and harnesses tech to support holistic wellbeing but that reflects the character and values of any given business as well. Tech is, after all, the product of an ecosystem itself. A thriving startup scene cannot be built up without the involvement of different stakeholders, including founders, investors and regulators. So, it’s only natural that the same logic should be applied when introducing tech products as regular features of the insurance world.
Insurtech Financial Products: Reinventing The Win-Win Scenario
YuLife is an adopter of what we see as a larger industry shift: turning financial products into a force for good. Today’s workforce is increasingly seeing financial wellbeing as an important component of their overall wellbeing. Workplaces that hope to retain their talent are beginning to view financial wellbeing as something far more thoughtfully integrated than simply paying a salary, also encompassing financial benefits that secure employees’ long-term financial futures.
Insurance has traditionally been seen as a “win-lose” product. When a claim is successfully made, the policyholder “wins” and the insurer “loses.” The truth is that by reimagining this approach, insurers, too, can gain from proactive insurance practises, which see policyholders incentivized to reduce risk through adopting healthy habits. And for employers, the result can be a “triple win” scenario. Healthier employees can be happier, more productive and more loyal, all while costing less to insure.