Sammy is the Founder and CEO of YuLife, the lifestyle insurance company providing life insurance, well-being, and rewards in one simple app.
Insurtech was already a steadily growing sector within the larger tech, startup and fintech spheres when Covid-19 made landfall, catalyzed cross-industrial digitization and accelerated the boom. This growth has been marked by the rise of insurtech giants such as Wefox and Zego, both with recent valuations above $1 billion (making the latter the U.K.’s first insurtech unicorn).
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So, what exactly is driving this insurtech surge, and how can companies and entrepreneurs in the space be successful? The insurance industry has long been perceived as boring, staid and adversarial, and is thus in need of an all-encompassing root-and-branch revolution. This change — the need for it and enactment of it — was expedited by the ongoing Covid-19 pandemic, which has underscored how important it is for financial organizations to offer lasting, digitally integrated value to users to safeguard their long-term well-being.
But this explanation only accounts for part of the bigger picture. A fundamental element of insurtech’s growing popularity is that it sits at the nexus of a multi-limbed digital ecosystem, vital to policyholders, potential customers and businesses alike. Insurtech stands to act as the great connector for a host of different spaces and verticals, all while imbuing everyday consumers with a sense of autonomy and independence that is critical now more than ever.
Building Bridges Between Different Industries
One of the best attributes of insurtech is the ability to find practical connections between industries that have historically operated according to siloed, vertically constricted data. Take health and wellness, for instance. Insurers are positioned to incentivize consumers to improve their well-being by reducing costs and offering lower premiums in exchange for completing healthy activities. And beyond individual use cases, businesses can also adopt this approach by acquiring insurance policies for their staff at a lower overall cost. The field of health and wellness is just the beginning.
Insurance is, at its core, a financial product. But there is no natural symbiotic mechanism that connects personal finance to healthy living — the world of banking, loans and mortgages is hardly commonly associated with wellness. But by harnessing their capabilities and technology to improve all aspects of a policyholder’s well-being, in ways that can actually make a difference in users’ day-to-day health, insurtechs can change this relationship.
This intersection can best be summarized by the term “well-being.” An individual’s holistic well-being is not just determined by physical and mental factors but by financial stability, too. Insurtechs are uniquely positioned to map and connect various well-being services and provisions, and the products being built to do so should demonstrate the across-the-board impact that tech-driven lifestyle tools can have.
Insurtech And Business: A Symbiotic Relationship
Insurtech can also look to give companies and their employees the best value for their money to keep ahead of other insurance entities. Particularly when it comes to departmental budget planning, let employers know that they don’t have to budget separately for insurance and for employee well-being. With an insurtech service, they can provide both.
Tech plays a key role in enhancing corporate efficiency. Insurtech providers can add an AI-powered capability to provide a data-based understanding of employees’ well-being needs and habits. By looking at larger trends in employee engagement to figure out what’s working and what isn’t, AI-supported tools can help businesses tailor programs accordingly. In my opinion, it’s in the best interest of insurtechs to help organizations bridge gaps and identify new opportunities in their well-being strategies.
Today’s Tech: The Key Differentiator
Advanced technologies serve as the linchpin of an insurtech ecosystem strategy. AI can take what used to be passive policyholder interactions and activities and harness them into insights that ultimately stand to benefit all stakeholders within the ecosystem. Savvy tech also allows for some of these processes to be gamified, which replicates the thrill of a game and channels it into well-being activities (for example, encouraging policyholders to “level up” and elevate their health and wellness routines in exchange for greater rewards like lower premiums or vouchers).
Insurance innovation must be driven by an ecosystem approach, one that not only taps into the power of AI and harnesses tech to support holistic well-being but that reflects the character and values of any given business as well. Tech is, after all, the product of an ecosystem itself. A thriving startup scene cannot be built up without the involvement of different stakeholders, including founders, investors and regulators. So, it’s only natural that the same logic should be applied when introducing tech products as regular features of the insurance world.
Insurtech Financial Products: Reinventing The Win-Win Scenario
My company is an adopter of what we see as a larger industry shift: turning financial products into a force for good. Today’s workforce is increasingly seeing financial well-being as an important component of their overall well-being. Workplaces that hope to retain their talent are beginning to view financial well-being as something far more thoughtfully integrated than simply paying a salary, also encompassing financial benefits that secure employees’ long-term financial futures.
Insurance has traditionally been seen as a “win-lose” product. When a claim is successfully made, the policyholder “wins” and the insurer “loses.” The truth is that by reimagining this approach, insurers, too, can gain from proactive insurance practices, which see policyholders incentivized to reduce risk through adopting healthy habits. And for employers, the result can be a “triple win” scenario. Healthier employees can be happier, more productive and more loyal, all while costing less to insure.
Source: Forbes
