May 16, 2020

Tempcover: How the insurance industry finally embraced the power of tech

Tempcover
Insurtech
Asia
Graham Cutbill-White
5 min
Graham Cutbill-White is the Head of Insurance Content at short term insurance provider, Tempcover. Here he examines how the insurance market in Asia has...

Graham Cutbill-White is the Head of Insurance Content at short term insurance provider, Tempcover. Here he examines how the insurance market in Asia has evolved.

 

Technology and auto insurance: How the industry finally embraced the power of tech

Insurtech, the now booming industry which uses technology to innovate and improve the insurance model, was born out of a need to resolve the long-standing frustrations between the insured and the insurer. 

Fixing age-old issues

Historically, the world of insurance, particularly auto-insurance, has been famous for its jargon, technicalities and exclusions. These intricately worded policies were often over-promised and under-delivered, causing resentment and a lack of a long-term relationship between company and customer. 

Seeing an industry which has remained largely the same for the past 80 or 90 years, Insurtech pioneers took the common issues and addressed them to create a service that put customers’ needs first. They also looked beyond the existing parameters of insurance using technology to develop new products such as AI underwriting and temporary car insurance as well as creating a user-friendly experience that encourages greater brand engagement and repeat business.

The start-ups making a name for themselves 

This approach initially made small waves in the insurance industry. But while the big names were ignoring these start-ups, other areas of business were extremely keen to get involved in these tech-savvy brands. 

An early example of this was China’s ZhongAn. As the country’s first online-only insurance provider, ZhongAn drew massive amounts of attention at home and abroad. This excitement garnered large financial backing which in turn lead to serious results both in terms of customers (630 million in its first year) and further financial success (Raising US$1.5 billion on its opening day on the HKEX). 

While this was a case of a well-backed business that had plenty of help to get to the top, the innovative nature of their product was responsible for the interest and investment at a level that no traditional insurer could ever inspire. 

Across Asia, there are a growing number of innovative start-ups that have embraced the Insurtech philosophy. 

Go Bear have looked to redefine the car insurance comparison site model and adapt it in the Insurtech model to the newly emerging South-East Asian market. Their aim is simple - make comparing insurance as transparent as possible by removing the boring and confusing language that often stops consumers from being able to compare fairly.  

Fed-up with the unfair way big insurance providers do business, co-founder, Andre Hesselink asked himself and his employees the simple question…

“What’s the simplest and most transparent way to make the best decision on insurance, credit cards and other complex financial products?”

Go Bear was the answer to that question. They looked to redefine the car insurance comparison site model and adapt it to fit Insurtech principles in the newly emerging South-East Asian market. 

With no affiliation to providers, they’re able to offer a fair and independent service. They also use a simple, jargon-free approach to wording that allows for a great experience for consumers. When you package this all up in a slick, mobile-optimised and user-friendly design, you get everything Insurtech was designed to offer. 

The need for technology in the Asian insurance market

While start-ups in the Insurtech field have had successes around the world, it’s rapid growth in Asia is due in no small part to the geography of the continent and the challenges of insurance that this creates.

Extreme distribution and diversity of the population in many Asian countries means that an efficient insurance solution is often difficult to market and issue. The shift to a digital-focused service removes many of these issues. Customers don’t need to call or visit a commercial space, they’re able to view, compare, purchase and claim within in an app or online. This massively appeals to those located away from central hubs as well as the new tech-savvy generation. 

By addressing many of the common complainants that car insurance causes, as well as connecting vast populations without the costs of multiple commercial sites, large insurance providers soon came calling. 

Big names like AXA, Aviva and Swiss Re have invested in start-ups, in-house schemes and partnerships in China, Singapore and India to develop their versions of the software and user experience Insurtech’s offer. As the Mckinsey Management Group put it in a recent white paper on ‘digital disruption’

“The incumbents have a choice: be disrupted or be the disruptors. Those that prosper in the digital future will be those that choose to be disruptors and invest in innovation today”

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Finally embracing the power of technology 

At the risk of being overtaken by the young up-starts, the car insurance industry as a whole has been forced to adopt at least the technology if not the customer focus that the smaller start-ups provide. It took the risk of losing customers and ultimately profits that drove the world of insurance to adopt the technology that has quickly become the norm. 

So the next time you purchase a car insurance policy on your phone, make a claim with an app or earn money back for sticking with your provider, remember to think of the early Insurtech pioneers who’s hard work and innovation have made the auto insurance a far more customer-friendly and user-experience focused industry. 

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May 4, 2021

Last chance: Sign up now for the VGS webinar on security

VGS
Security
Compliance
Fintech
William Girling
1 min
On 6 May at 10am PT/1pm ET, FinTech Magazine will be hosting an exclusive live webinar with VGS and Quo on security and compliance in fintech
On 6 May at 10am PT/1pm ET, FinTech Magazine will be hosting an exclusive live webinar with VGS and Quo on security and compliance in fintech...

On 6 May at 10am PT/1pm ET, FinTech Magazine will be hosting an exclusive live webinar with VGS and Quo on security and compliance in fintech.

You can still register for the webinar here.

Speaking at the event - titled 'Grow your business by offloading security and compliance’ - will be Very Good Security’s (VGS) VP of Business Development & Strategy, Peter Berg, and Tucker Haas from Quo Finance.

Throughout the session a number of highly important topics will be covered, including:

  • The difficulty of integrating compliance into fintech app development
  • The benefits of partnering with data security experts
  • Practical advice for new fintechs
  • How to reassure customers about the safety of their data
  • Exciting innovations in the personal fintech space

Security and compliance, particularly in the post-COVID finance industry, is set to become much more complex and no less important. Companies will need to seek the advice of thought leaders and sector experts if they are to successfully navigate the continual change.

Do you want to remain compliant in today’s market? There’s still time to sign up for VGS’ webinar here.

This is an event that should not be missed.

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