To kick off the year, we are pleased to present a new blog series: Our experienced partner SOSA FinTLV will from now on regularly provide you with exciting trends, developments and impulses from Tel Aviv - the startup metropolis par excellence. In their first article, they share with us their thoughts on the "Innovation Gap" and the need to look beyond their own industry.
Insurtech 2.0 Revolution
While the insurance industry has not traditionally been a pioneer in new technologies and business models, they are increasingly looking for ways to follow trends and enter new markets.
Incumbents understand that they need to work "outside in" and embrace new technologies from the startup ecosystem to remain successful in the long run.
A good way to look to the future is to work with InsurTech startups. According to a recent survey, three quarters of insurance companies recognize the potential of InsurTech and the indispensability of digital transformation to remain competitive and successful in today's market.
However, many industry professionals limit themselves and their innovation potential by taking a "top-down" approach that only considers insurance industry solutions and start-ups. But future growth opportunities will increasingly arise outside a company's traditional business, and these opportunities will require disruptive new approaches and collaborative models.
Thinking outside the box
Insurance companies that seek to generate technological innovation only through startups within their own industry miss out on the many solutions that technology advances from other industries can provide and ultimately make the difference.
This approach often comes from a lack of understanding of the technology industry and its processes, products and landscapes. On the InsurTech entrepreneur side, there is often a lack of comprehensive understanding of how large insurance companies and businesses operate. InsurTech products therefore often reflect these misunderstandings and are limited in their ability to provide truly disruptive technologies to the industry.
The forces causing the disruption are mainly driven by technologies such as AI, image processing, Big Data and analytics, robotic process automation solutions, machine learning, IoT solutions, and new business models developed for other markets but that can be leveraged for the insurance business. These solutions could break down the insurance industry into parts of an overall process.
Many of these technologies are used in industries other than conservative insurance. These industries use mature and robust technologies that have already proven themselves.
Often, technologies from outside the insurance industry, if properly researched and focused on solutions to specific challenges identified by traditional industry veterans and leaders, can be a better fit than startups from within the industry. Successfully collaborating and identifying the right opportunities requires a combination of insurance expertise from industry veterans, knowledge of how large companies operate and act, and a broad understanding of the startup landscape across different sectors and industries.
Insurers are looking for pure InsurTech, while startups don't always realize the potential of their technology for the insurance business due to the complexity of the business. This is the "Innovation Gap" and thinking outside the box narrows this gap.
Adaptation to new technologies
Forward-thinking insurance companies have already begun to embrace and identify opportunities outside their own industry to develop innovative solutions that will enable them to stay relevant and survive in the market. These companies are looking beyond InsurTech startups; they are taking technological innovations and ideas from other vertical markets such as construction, automotive, IoT, HR, cyber and security and applying them to insurance.
The ability to leverage these mature technologies allows insurers to achieve "quick wins" and more easily deploy new solutions with lower risk and higher pilot success rates (POC's).
Examples:
Carbyne is a national real-time emergency communications platform that helps emergency services manage and control emergency reports via live video and geolocation. Carbyne has adapted its technology to the use cases of Carbyne Insurance. This spin-off solution, built on Carbyne's platform, provides insurance call centers with advanced video and geolocation capabilities that help reduce average claims and increase efficiency in the claims process. The solution can be implemented in a matter of days and integrated with complex core systems.
Hybrid artificial intelligence (AI) solutions that combine the power of AI with a human-controlled component are another technology being used in the insurance industry. For example, heat intelligence - intelligent AI machines and global personnel - are used for document and image processing, gaining insights from images and videos as well as entities. The ability to turn unstructured data into structured data is critical to the insurance business in many use cases (fraud detection, better underwriting, better on-boarding of a new customer, and more).
The ability to successfully bundle and leverage technological advances from other industries to develop new products and services in the insurance industry requires a broad knowledge and awareness of the startup landscape to find the right opportunities and the best solution. This is what we call "Insurtech 2.0." Join the revolution!
Learn more about FinTLV and SOSA on their websites.
Insurtech 2.0 Revolution | SOSA FinTLV Blog Series
