How Fintech is Revolutionising the Insurance Sector
The fintech revolution is benefiting the insurance sector in more ways than possible. It is ensuring secured, personalised, and better customer service.
From the time insurance sectors came into existence, people have begun insuring everything from electronic appliances to their own lives. This increased need to insure everything has expanded the demand of the insurance industry. In fact, the industry managed to hit a total of over $4 billion in the year 2018.
But, with the expansion of the market, the responsibilities of insurers have increased too. They are expected to give good risk management for financial losses now. A peek into the insurance sector’s market size provides us with an idea of how much trust people have in this industry. To preserve this trust and provide better risk management services, insurers use technology in their daily business practices. Many companies have started putting their money into fintech, and many are to follow their path soon. The rise of fintech is allowing insurers to focus on what’s truly best for the customer.
How the Rise of Fintech Is Shaping the Insurance Sector
There is increased competition in the insurance sector, as companies have started giving other possible financial solutions to insurance. For example, banks are giving off loans to help people with an instant solution to their financial losses. Similarly, the health care industry is giving medical membership facilities to their staff as an alternative to insurance.
Fintech helps insurance companies achieve a competitive advantage over other industries by providing them with exceptional services. Some of them include:
By using specialised devices like IoT, insurance companies can gather data that they can use to provide personalised services to their customer. For instance, health insurers can use the patient’s medical history to get an insight into the individual’s behaviour. Insurers can use this information to offer them premiums that are tailored to their needs and cover their normal or life-threatening medical conditions. Another benefit of using IoT devices is that insurers can get information about the individual’s driving habits and offer them personalised plans based on it.
The use of advanced technologies such as artificial intelligence (AI) and blockchain can affect the insurance industry in many ways. For example, blockchain can help insurers to protect the data of the consumer. Consumers can also use it to control their data and provide access to the insurer to help identify potential fraud. Blockchain allows the insurers to share the transaction data and join together to detect any fraudulent activity.
In 2018, the market size of the global fintech hit a record of USD 111.8 billion, based on the benefits that one can accumulate from it. Increasing consumer expectations and technological development are bringing about innovation in the sector. These innovations are developed through the partnership of tech firms and insurance companies. It is high time for all the big and small industries to invest in fintech and bear the fruit of the technological revolution.