Some 86% of global insurers are concerned their revenue is at risk to the emergence of Insurtech players, according to new research by PwC.
However, it shows that the insurance industry is more active than the rest of the financial services sector in responding to this, with 52% of insurers now saying that innovation is at the heart of their strategy.
This is reflected in 58% planning to invest in mobile technology over the next year, and 68% expecting to adopt blockchain as part of an in-production system by 2018.
“Innovation in insurance, driven by the rise of Insurtech, has come a long way over the past year. There is no longer any question of whether companies will be involved with Insurtech,” PwC global insurance leader, Stephen O’Hearn, said.
“Insurance has always been an industry based on data and it is encouraging to see insurers investing heavily in a new wave of technology enabling them to use the data they have at their disposal in the best possible way.
The research is based on the responses to a survey of 189 senior insurance executives from 39 countries, finding that 56% believe up to 20% of their revenue is under threat.
A further 20% think up to 40% is at risk, while 10% are worried that even more could be lost.
In response, 84% plan to invest in data analytics, in the hope that it will help them better engage with customers and generate better risk insights – the two most important innovation aims for insurers.
It was also found that 81% are now familiar with blockchain technology, which is thought to have the potential to help automate claims processes, streamline data, and aggregate and allocate catastrophe risk or losses.
PwC urge insurance firms to partner with Insurtech innovators in order to better understand their customers and reach new segments of society, however, 63% of are concerned about regulation and data privacy when working with startups.
“Undoubtedly insurers still have their reservations, but it’s great to see increased investment in technology such as artificial intelligence and blockchain and an interest in partnering with others in order to make the most of this excellent opportunity,” O’Hearn added.
Artificial intelligence (AI) will help insurers underwrite $20bn (£17bn) worth of premiums by 2024, a more than 1,500% increase on the £1.3bn forecast for this year.
12 August 2019
Insurance firms will spend more than three times as much on automation in five years than they do today, according to an analysis by Juniper Research.
18 July 2019
More than half of banking and finance customers use FinTech products and services, according to a worldwide poll by the deVere Group.
03 July 2019
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