What’s in store insurtech in 2022?
Assaf Tayar, Managing Director of BCG Platinion, gives us his predictions for the year ahead
The pandemic has been one of the major disruptors of the insurance industry in recent years. And although pandemic-related restrictions have eased across the country, the future remains uncertain as new variants arise to threaten what little progress has been made.
All around the world, and in most industries, the pandemic accelerated digital transformation. For the insurance industry, the role of technology in all aspects of operations is now essential, especially as more people take up flexible working or decide to work remotely for the foreseeable future.
These new developments are forcing business leaders to re-evaluate how their business operations and user experience fit with what customers expect in a technologically advanced world.
In this piece, I share some of the key insurance trends to watch out for in 2022.
In-depth Guide to Insurtech: Trends & Technologies
The insurance industry is based on risk pricing. Insurtech aims to mitigate challenges in the pricing of risk such as lack of available data and inadequacy of manual data analysis. As a result of these operational risks, insurance companies faced financial difficulties or charged higher premiums.
Thanks to the advances in technologies like AI/ML and IoT, insurance companies can better manage their risk exposure and improve operations. Insurtech companies either supply tech solutions to incumbents or offer insurance services directly to consumers.
What is insurtech?
Insurtech means using emerging technology in the insurance industry. This is mostly by
- replacing manual processes leading to more efficient operations
- achieving better risk assessment
- providing better customer service leading to higher customer satisfaction
It is possible to divide Insurtech companies into two categories: D2C and B2B.
Thanks to improved data collection, data analytics capabilities, and consumer-friendly apps, new insurance companies don’t need middlemen like brokers and agents to find their customers. These companies sell their services directly to B2B or B2C end users competing for market share with traditional insurance companies that rely on traditional distribution channels like brokers.
Insurtech firms provide services to improve the insurance practices of incumbents selling products like Property & Casualty (P&C) or health insurance to individuals or businesses.
Are all insurance companies insurtech companies?
Due to the transformative impact of insurtech on insurance, all insurance companies are starting to adopt the term. Just as fintech practices have forced financial services incumbents like Goldman Sachs to call themselves technology companies, we may soon see a similar pattern in the insurance industry.
India Insurtech Annual Report 2022
IIA, BCG and key industry players have collaborated to identify dominating trends in the Indian insurtech landscape. For the purpose of the report, IIA & BCG have sourced multiple case studies from leading Insurers, brokers, and insurtech players in India under various themes: embedded insurance, employee group insurance, enhancing customer experience, data & analytics, creating marketplace of offerings, building health ecosystems, national health stack etc. The report also gives an overview of insurtech funding in the last year and also highlights what key industry players are focusing on while adopting digital/tech side of insurance and also defines key imperatives for stakeholders in the end.
Insurtech Trends for 2022
We’re well past simplistic disruptive thinking, where startups would present themselves as the Uber of X.
The insurance sector is facing unprecedented change in a rapidly evolving environment. Energy transition, circular economy, urbanization, digitization: These trends have far-reaching consequences for the way we live and work. From sustainable investing to healthy living, from sensor revolution to climate change, the playing field has become incredibly varied and complex over a relatively short time. How is this playing out for the insurance sector?
Amid the abundance of sector reports by industry analysts, reinsurers, sector associations and consultancies, we provide you with a recap of what we believe are the key trends to monitor closely for 2022 and beyond.
20 Growing Insurtech Startups In 2022by Josh Howarth
You may also like:
5 Key Insurance Industry Trends
20 Rising Medtech Startups
8 Healthcare Trends to Monitor
Through the first three quarters of 2021, funding in insurtech surpassed $15 billion with about 70% of funding going towards U.S. based companies.
Overall, the insurtech market is forecasted to grow at a CAGR of 10.8% from 2019 to 2025, reaching $10.14 billion in revenue by 2025.
With that, here’s our list of fast-growing startups in the insurance technology space.
What to expect from insurance M&A in 2022
M&A in Europe and the Americas rose steadily, with innovation as a key deal driver. Reinsurers and insurers continue to consider alternative routes for growth and M&A activity is anticipated to remain bullish throughout this year.
The report highlighted that the Americas was the most active region in the M&A space, accounting for over half of the global annual total, with 224 deals and a year-over-year increase of 17%. In Europe, deal activity was up 21%, with a notable second half of 2021, completing 74 transactions.
A key driver for M&A deals can be attributed to insurtech, and the innovative deals that have been facilitated over the past year.
“There are so many growth strategies being deployed in the insurance industry,” said Vikram Sidhu (pictured), a managing partner of the corporate insurance team at Clyde & Co.
Blockchain in health and life insurance – Turning a buzzword into a breakthrough
Increasing costs, discerning customers, and innovative disruption are just a few of the challenges faced by health and life insurance companies. How can a cryptocurrency technology like blockchain potentially solve these problems and more?
Using blockchain in health and life insurance: Seeking wisdom from the crowd
Health and life insurers are among the many players scrambling to determine how blockchain could be adapted to improve the way they maintain records, execute transactions, and interact with stakeholders. Key questions center on whether blockchain’s unique attributes could help insurers cut costs, manage risk, improve customer service, grow their business, and, ultimately, bolster the bottom line.
Deloitte’s Center for Health Solutions and Center for Financial Services recently partnered on a crowdsourcing research project to look into how health and life insurers might leverage blockchain and related technologies to strengthen key elements of an insurer’s value proposition. The crowd’s mission was to brainstorm how this emerging technology could be applied by insurers in the next five to 10 years to improve current standard operating procedures and systems while enhancing the customer experience.
So, what did we find? Six use cases that are the most realistic and promising for health and life insurers. While it is still early in the adoption curve, the applications explored here provide a starting point for insurers looking to unlock the potential of blockchain. Scroll down to explore these use cases and download the report for additional insights.
Important Blockchain Trends For 2022
The crypto world was booming and transforming in 2021 with its new blockchain trends and inventions, but 2022 will bring even more.
DAO – Decentralized Autonomous Organization
The crypto world was booming and transforming in 2021 with its new trends and inventions, but this is just the beginning. Blockchain technology has taken over many industries and given a start to new products. We have already seen some trends this year, and here is what to expect from the crypto universe in 2022.
The quick start guide to building an insurtech MGA in 2022
Insurers today have access to more data than ever before, enabling them to improve risk assessment, reach untapped markets, and deliver outstanding customer experiences. As a result, a new class of tech-driven managing general agents (MGAs) is emerging, blazing trails and building innovative products for underserved customers.
The founders of these emerging MGAs may come from various backgrounds, but what they have in common is the understanding that technology is the key to unlocking these fresh opportunities. Building any new business from scratch, however, comes with its fair share of challenges . That’s why we’ve come up with three key steps to put you on the right path to bringing your insurtech MGA from concept to launch.
Insurtech 2022: Hype vs. Impact
Insurtech is no stranger to hype but with 2020 and 2021 bringing far more change than anyone bargained for, the industry has seen a fresh round of predictions and speculation.
In 2017 we set out to sort the substance from the sensation in our first hype vs. impact article, as shown in the infographic below. In 2022 we revisit our predictions and set out our stall for the future.
2017 vs. 2021: How did we do?
Thankfully the majority of our 2017 predictions have come to fruition with AI, big data, IoT, usage-based and telematics insurance all continuing to have an impact. As predicted, other areas have not been so lucky and have, therefore been dropped from our 2022 assessment. In particular:
Self-driving vehicles: Autonomous vehicles saw huge hype in 2017 but with predictably little impact since, given the complexity of getting to mass adoption. We are still waiting for the ‘autonomous revolution’ which we believe will come, but not in the near future. In the meantime the emphasis is on the future of mobility (see below).
Blockchain: Blockchain as a disruptive technology in insurance has not materialised in a meaningful way despite continued hype surrounding decentralised ledgers. In 2022, we turn to the hype surrounding cryptocurrencies to see if this offers more promise.
Peer to Peer: We previously commented that P2P was just too complicated for insurance and this has proved to be the case with many InsurTechs evolving closer to micro-mutuals than genuine P2P or pivoting away from the model altogether, as Lemonade did in 2017.
Drones: We did not expect drones to become mass market in 2017 and while commercial drone use has increased it remains a niche area for the industry covered by insurers such as 2018 InsurTech Impact 25 member, Flock.
Retail and commercial disruption: In 2017 innovation was much more segmented by market segment. We no longer see this segmentation as helpful.