BI INTELLIGENCE
MAR. 16, 2017, 12:12 PM
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Insurtech continues to be an active segment of fintech, with startups emerging in all areas
of the industry, including within the life insurance space.
One such insurtech, Israeli firm
Atidot, is now bolstering its capabilities, announcing the launch of its cloud-based, predictive data analytics platform for incumbent life insurers on Wednesday, according to a press release seen by BI Intelligence. Atidot says its platform can help life insurers better leverage their data to more accurately predict their policy holders’ behavior, and adjust their business strategies more effectively.
Atidot’s platform claims to make policyholder profiling more efficient. An insurer begins by uploading their existing customer data onto the platform, where it’s then automatically and quickly sifted and categorized using artificial intelligence (AI) and machine learning technology: Atidot claims a million policies take less than an hour to process. The platform then creates “profile groupings” of life insurers’ policyholders by analyzing them based on metrics including age, occupation, gender, and average salary for their geographic location. The resulting profiles give the life insurer better insight into the predicted behavior of any given policyholder, enabling it to adjust its business model either by upselling to more responsive clients, or by shifting retention efforts toward customers with policies at greater risk of lapsing.
Life insurance is a market particularly open to disruption by new technology. This is because life insurance is a product that is typically bought once, and then seldom revisited, meaning life insurers have few touchpoints and limited interaction with their clients. This puts them at a competitive disadvantage, as this lack of contact can diminish customers’ loyalty to their life insurer, and make it easy for insurance startups with better customer experience offerings to poach clients. Therefore, analytical tools such as Atidot’s will be especially valuable to life insurers if they provide better insight into their clients’ behavior and how they can appeal to their needs and wants.
The global insurance industry is worth nearly $5 trillion, and insurance companies are at risk of losing a share of this valuable market to new entrants. That’s because these legacy players have been even slower to modernize than their counterparts in other financial services industries.
This has created an opportunity for a group of firms known as insurtechs. These startups are leveraging new technology and a better understanding of consumer expectations to increase efficiencies in the insurance industry. Some are helping incumbents deliver better end products, while others are directly competing with legacy players.
Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on insurtechs that looks at the drivers behind the increasing number of insurtech companies, how they are helping or disrupting legacy players in the insurance industry, and where legacy players are innovating off their own backs.
Here are some of the key takeaways from the report:
- The opportunity is currently biggest in the US and Europe. That’s because these regions have large, very mature insurance industries.
- Insurtechs’ products and services mostly target retail customers. This includes small businesses and consumers.
- Most insurtechs are acting as enablers. This means that they offer products and services that help insurers and reinsurers improve their processes and better serve customers.
- Of the main players in the insurance industry, brokers are most at risk of disruption. This is because insurtechs can easily replicate their services and are solving historical industry problems faster than legacy players.
- Legacy players are also innovating. In particular, insurers and reinsurers are investing in insurtechs and fintechs working with relevant technologies.
