Insurtech innovation shifts from insurance to ensurance

Digital transformation is much more than a technology play, especially for insurers. Transformation is altering the way insurers evaluate, enter and serve markets. Insurers are looking beyond simple indemnification, which is transactional, to more continuous engagement and services that target the insured’s true goals and needs. Insurers are expanding their offerings with products and services that advise customers and help them identify and avoid risks that might result in a loss. It’s a shift from insurance to ensurance.

That’s a change of such magnitude that even the largest companies can’t make it on their own. After all, insurers have to stay focused on their core business like assessing risks, selling policies and paying claims. To spur innovation, insurers are increasingly supporting, funding and partnering with insurtechs and startups developing tech-driven solutions that insurers can use in creative ways.

An industry shaken, not stirred

Insurtechs are exploring and innovating in areas like the internet of things, blockchain, analytics and collaboration, creating solutions that can help customers lead better, safer, healthier lives. And they’re leading the way in creating more compelling experiences that help insurers reach and serve customers more effectively.

Surfly, a winner of the DXC Invitational, DXC’s insurtech program, helps advisors and salespeople explain product offerings to customers with a co-browsing solution that recreates the feeling of an in-person meeting. Digital Fineprint, another Invitational winner, is helping commercial insurers target small to medium-sized businesses, a highly fragmented market that would be difficult to serve profitably without an innovative approach.

Companies like Metromile are advancing the concept of pay-per-use car insurance policies in areas where car use is infrequent. Using factors like location, age and driving history, Metromile calculates a customer’s monthly rate. It uses telematics to track the usage and adds a few cents per mile driven to the monthly bill.

Combining facial analytics derived from selfies with other data may help determine your life insurance rates. Lapetus Solutions incorporates this capability in its product Chronos, which would enable a customer to buy life insurance online in just a few minutes with no medical exam.

These are just a few examples of many that are changing the industry. But the term “insurtech” is a bit limiting. Many more companies who do not specifically target the insurance industry are creating solutions that have significant value for insurers.

New data applied in new ways

Let’s look at two types of data that are being applied to the insurance industry in new ways: location data and legal case data.

  • Location data. Mapcite, winner of the DXC Invitational Australia, offers location-based analytics and predictive and precision modeling, which are used in multiple industries. For insurers, the ability to map weather events and natural phenomena to precise geographic locations gives them a new and unique way to define total of risk and liability. For example, by marrying a hurricane’s path with the location of customer assets, an insurer can generate a good estimate of the company’s liability. Further, Mapcite’s ability to analyze location-based data can be used to identify instances of potential insurance fraud. It can even be used in a broader sense for geofencing (establishing boundaries for mobile device use).
  • Legal case data. Premonition is a company that collects case data from legal systems across the United States such as information about the plaintiff, nature of a case, judge, defendant and representation for both sides. Comparing the charge in the case against these factors, Premonition can offer a statistical percentage of victory in the case. Interesting. But how does that apply to insurance?

If you’re in auto insurance, it can matter a lot. Information like this can identify trends between certain lawyers and judges for a particular case type. It can help insurers prepare more effectively, identifying, for example, when more drone information or better telemetrics would improve the odds of prevailing in a case. Should the insurer settle? And if so, what should they offer? Or do the odds favor a trial? Having answers to questions like these can help insurers make better pre-trial risk decisions that lead to better outcomes for the company and policyholders.

Insurance has long been known as a staid industry that values consistency over change, but those days are over. Industry leaders like MetLife, Aon and Munich RE recognize the value that can be created by partnering with insurtechs through open APIs and digital platforms. Expect to see many more exciting developments and partnerships as insurance undergoes an extreme makeover.

Read more in the position paper, Reimagine insurance by engaging customers in the digital age.


Brian Wallace Brian drives the vision and strategy for DXC’s insurance software offerings. He brings notable depth and breadth of experience in insurance, digital strategy and emerging technology to this role, having previously served as DXC’s Global Insurance chief technology officer. Brian engages with clients, prospects and partners around digital disruption and the future of the insurance industry. @bwallac5

Faisal Siddiqi is innovation chief technologist for DXC Technology’s insurance practice and DXC’s Technology Office, and a Distinguished Engineer. Faisal helps identify key emerging technologies and apply them in DXC’s products and solutions, open communities, and industry standards bodies. He leads open source, blockchain and design thinking communities in DXC. @Faisal_Siddiqi

Phil Karecki is chief technologist, Americas insurance industry, DXC Technology. Phil brings innovation and new technology to bear to solve business needs in the insurance industry. He helps insurers master a “better, faster, cheaper” business model that digital technologies enable. @pkarecki 

 

 

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