The insurtech is now prevailing in the insurance market, from emerging trend kept an eye on by executives and R&D of companies, is now a ‘hot topic’ to be addressed at every level of the company: insurtech is not a trendy word, but rather the transition to a new age for insurance where the technology is a leading element transforming processes, models and services.
Among the technologies proving to be the most interesting for the insurance industry, there are blockchain and artificial intelligence, discussed at a recent conference of ANRA, the association that since 1972 brings together risk managers and corporate insurance managers in Italy. Here’s Alessandro De Felice, President of ANRA, explaining the potential of smart contract and industry 4.0.
“Insurance always follows the same model of risk identification, risk assessment and risk transfer at a given price. This mode may change radically with the widespread adoption of ‘smart contracts’, ie electronic insurance contracts that record on the blockchain certain events and automatically trigger the correct clause based on the event. For example, in the case of travel policies for lost luggage damage, the system reads and matches the luggage data with the cancellation or delay data and automatically pays for the compensation without the need for the traveler to report it to the desk. Furthermore, thanks to developments in the 4.0 industry, it will soon be possible to automate compensation for production: in the event of a sudden shutdown of a machine, a system of sensors detects the damage, transmits the data, calculates the loss in production value and the company will receive exactly the compensation for how long the machine does not work with a widespread and unalterable register of the event shared by all parties involved”.
Technological acceleration in the insurance sector as in many other financial and non-financial sectors, is mainly brought by startups, that sometimes turn to the final consumer as an alternative to traditional insurance, but more often want to work with traditional companies, if not be acquired. According to the Anra Convention, there are now more than 1400 insurtech startups worldwide (Source: Insurtech Constructive, Nulla si distrugge, Michele Treglia) and 10 accelerators.
Venture Scanner, a data-driven analysis company that offers real-time reporting, even includes 1479, in 14 different categories, distributed in 62 countries (even if there are now real insurtech hubs), including 481 which have collected to date investments from venture capital for over 22 billion dollars.
As reported in the video of the most financed insurtech in the world, there are several companies – such as Zhong An, now listed on the Stock Exchange – for which the term ‘startup’ is now very narrow as numbers and market begin to be those of well-established companies.
Many of the newest ones are working on the blockchain applied to the insurance industry: we recently mentioned Etherisc, not the only one, there are also the well-known Lemonade and Safeshare Global, Everledger, Bitrust, Kasko2Go, Dynamis, Teambrella.
According to CBInsights, the killer applications for blockchain technology will be available in the insurance sector: many challenges have to be overcome in an industry that has not yet fully encompassed even the cloud and that is hyper-regulated, although potential is enormous in the areas of health and life insurance, home and property, risk and fraud management, and re-insurance.
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