InsurTechs are digitizing insurance services and rethinking insurance processes – for insurance companies themselves and their customers. In doing so, they are inevitably initiating the change from traditional to digitized value chains in the insurance market.
The insurance industry sees them as both an opportunity and a threat. What they ultimately become depends on whether insurance companies evolve and welcome InsurTechs as partners or view them as competitors.
In this article, we look at what InsurTech companies are, how they are changing the insurance industry, and how you as an insurer can work together to optimize and realign processes.
What is an InsurTech company?
The term InsurTech stands for “Insurance Technology”. InsurTechs are companies that set up insurance services based on digital technologies.
Since the InsurTech market is relatively new, the companies in this sector are currently generally start-ups.
Is competition in the insurance industry growing?
As full-service insurers, InsurTechs are in direct competition with traditional insurance companies. In order to position themselves in established market segments, however, they often lack market and insurance knowledge, patience in developing processes, trust and, last but not least, investors.
For this reason, InsurTechs are increasingly moving into niches and occupying sub-areas within the segment. One such segment is embedded insurance, i.e. insurance that is integrated into a service or product that a consumer purchases anyway. The study "Europe Embedded Insurance Business and Investment Opportunities" assumes that annual growth of 19.4 percent is realistic in this niche until 2029.
This reflects the trend that policyholders do not want to bother with their insurance. This is precisely where InsurTechs support insurance companies in B2B.
Competitors become partners
When full-service insurers enter into partnerships with InsurTechs, they expand their portfolio and supplement their complete solution with small sub-areas.
For example, they develop new processes or procedures so that policyholders and the insurance company itself can record and process claims completely digitally. InsurTechs also rely on innovative services to manage policies, minimize risks using predictive analytics, or create customized offers with flexible prices.
If full-service insurers see InsurTech companies as partners rather than competitors in the future, they will integrate their offerings into their own insurance network in a way that creates added value. The new services mean that insurance companies can meet customer needs and requirements much more effectively - a win-win situation.
So how do you develop your traditional company with the help of InsurTechs?
No partnership without digitalization
In order to enter into partnerships with InsurTech companies, insurance companies must adapt to the new players on the market. InsurTechs position themselves as digital insurers from the outset. They are very modern both internally and in relation to customers. This means that traditional companies must first have a certain level of digital maturity and create connections before they can do business with InsurTechs. Your insurance company will therefore need a digitalization strategy by then at the latest.
From on-premises to the cloud
It is not enough to digitize traditional processes and implement them locally. This is because you are only digitizing internal processes, not those with other stakeholders such as policyholders or partners.
The foundation of your digitalization strategy should be to set up internal and external processes in the cloud. Cloud solutions simplify exchange, enable access to documents regardless of location and time, and enable parallel work. They are also the basis for additional services such as smartphone apps for customers or process automation through AI .
Unhindered access to information
Digitalized insurance processes also centralize the flow of information. All documents and data are stored in digital files within an Enterprise Content Management System (ECM) . This avoids dark data - data that is available but not usable. With an ECM system, you extract relevant information, structure it and store it in the correct digital file in a context-related manner. Insurance contracts, for example, can be found at any time in a corresponding folder in the digital customer file .
Employees and customers alike can access the information they need quickly. At the same time, centralized and automated document management creates additional opportunities for insurance companies: they can use data analyses to further develop insurance products based on data or identify risks at an early stage.
Easy connection options
Analyses and other benefits are enhanced when systems such as an ECM communicate with other systems. This creates an ecosystem without media disruption. Modern ECM software already offers many integration options and can also be easily connected to other systems if required. This is exactly what is necessary in order to work with InsurTechs.
This is comparatively difficult with legacy systems. Here, the integration options into third-party systems are very limited and extremely complex.
Innovative and future-proof systems
Legacy systems are therefore not future-proof. They also mean that you miss out on every innovation - such as the use of artificial intelligence (AI). AI now simplifies and optimizes numerous processes. On a small scale, the use of AI makes daily routine work such as that of a clerk easier. On a large scale, AI processes big data and optimizes all associated processes.
Currently, AI is the technology that everyone is talking about. In the future, it will probably be different. But one thing is certain: legacy systems do not keep up with the times. Your goal, however, should be to make your IT landscape future-proof. To do this, it must be scalable and offer room for innovation.
Doxis Intelligent Content Automation for insurers
Doxis is your future-proof ECM system. With ICA, Intelligent Content Automation , Doxis sets new standards for today and the future. It relies on cloud-native solutions, manages content and automates content processes across systems, integrates seamlessly into a variety of business applications and puts information into context thanks to content understanding. This means that all the requirements are met for your insurance company to work successfully with InsurTechs.
Practical example: Managing insurance documents with Doxis
With Doxis, processes succeed almost automatically. The following example shows how you manage the documents in Doxis once the contract has been signed.