How insurtechs can accelerate the next wave of growth?

The wave of digitalization has spread across various sectors. Insurance companies has also been observed adopting digitalization at significant rate. The traditional model of insurance is drastically being transformed into modern approach known as insurtech. The word "insurtech," that combines the terms "insurance" and "technology," originated in light of the term "fintech." Moreover, the need for new approach has become necessary owing to the slow progress of insurance sector. Insurance coverage ownership rates have decreased by about 3% since 2021 and by approximately 12% during the previous ten years, globally. Hence, the importance for insurtech is growing.

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What makes insurtech important?

• Enhances customer experience- Customers prefer selecting their coverage, comprehending their demands, and receiving individualized care. Which is why the technology is being used to its full potential. he future of insurtech is shifting towards self-service, online transactions where customers have a choice of engagement channel, rather than having to make a trip to a branch or speak to a salesperson.
• Insurtech is more efficient- Both policyholders and policy investigators are able to utilize the internet and applications to conduct research and consider their options. Several insurtech firms enable consumers to immediately get the knowledge they need without being slowed down by procedures without awaiting office hours or an available agent. This is possible with insurtech.
• Improve flexibility- Modern insurtech products are far more probable to feature flexible, individualized, temporary, or transferable plans. Insurtech is more likely to offer people with specialized coverage for particular requirements for a specified duration rather than requiring them to enter into long-term contracts.
• Lower operational cost- Traditional insurance providers relied on physical locations that required labor-intensive manual labour. Insurtech is businesses are able to function remotely while having employees interact with clients globally. The online business uses a similar operational strategy to a skater since it requires fewer overhead.

Innovations which is influencing insurtech

• Growing adoption of artificial intelligence- Artificial intelligence has illuminated the need for human intervention for particular task which was earlier need to be performed workers. For instance, in the past, clients had to have a conversation with representatives in order to have their queries addressed; currently, engaging conversations with chatbots may enable a customer to get advice without interacting to a human.
• Automation- Automation has made easy for a client to fill the documents online, without any need to visit and fill the physical form in institution. The information is automatically compiled into a policy that is ready for signature or saved in a data warehouse.
• Blockchain- Cryptocurrency enable the most secure transaction. Hence, its importance is growing in insurtech. Additionally, it enables the operation of smart contract agreements that remain on a blockchain, dormant until a set of requirements are satisfied for releasing insurance proceeds or validate an insurance client.

Further, there has been recent trend still making its place in insurtech industry such as drones. Innovative hardware development is an additional aspect of insurtech. Drones have the potential to inspect a site for a claim or to assess property damage in areas where it would have been dangerous for individuals to walk through. Due to drones' growing dependence on high-definition video and photo quality, inspectors have the ability to place an important degree of reliance on screenshots and flight data that has been saved. However, there is still lot more innovation need to be made for the progress of insurtech. Owing to the growing advancement in technology the next wave of insurtech is expected to detrimental. The traditional insurance providers find it difficult to adopt with technology changes. Additionally, the risk of cyber security is also growing. However, the skilled insurer who are young are taking lead of the market. Also, over the past ten years, investment in insurtech firms have totaled about USD 15 billion, and in the initial three quarters of 2021, insurtech investment exceeded that of 2019 and 2020 altogether.[R1] Also, various initiatives has been launched to educate the insurers. Therefore, with the startup taking control this issue could be resolved. However, the issue of cyber security still remains the same. Though it is skilled personnel or unskilled the risk of cyber security will grow with the growing adoption of technology. This would highly disrupt the market. As a result, insurance companies have to take into account a broader ecosystem for cyber security, which includes partners from all points along the supply chain. Brokers, law firms, cyber security providers, experts in threat intelligence, IT forensics companies, and PR agencies, for instance, may fall under this category. Insurers may acquire market share in one of the biggest growth opportunities that exists in the global insurance market through creating these kinds of services and acting as the end-to-end glue that connects these partners and components. At the same time, by being an integral component of the initial reaction team, they have the opportunity to provide exceptional service for their clients in their time of need.

Government initiatives for cyber security in 2022 by different countries

• The Israeli government stated that it will work together with the Inter-American Development Bank (IDB) to introduce a new cybersecurity programme, pledging USD 2 million USD to help Latin America and the Caribbean (LAC) countries improve their cybersecurity capacities.
• The Cyber Security Agency (CSA) of Singapore has introduced an innovative certification programme that recognises businesses that have embraced and used efficient cybersecurity practises.
• The US government released a five-step 5G Security Evaluation Process Investigation to plug up any holes in current security assessment standards and guidelines spurred on by new 5G capabilities and services.
• The Canadian government unveiled laws that will strengthen cybersecurity in the financial, telecommunications, energy, and transportation industries while also protecting Canadians from harm. To bring telecommunications in line with other crucial industries, Bill C-26, An Act Respecting Cyber Security (ARCS), intended to replace the Telecommunications Act by including security as a goal of policy.
• Australia's New South Wales (NSW) state government chosen CyRise, the only nationally recognised cybersecurity accelerator, to manage its $1 million Cyber Security Accelerator programme, that is situated in Sydney's Tech Central neighbourhood. The programme is conducted by CyRise and is made up of three-day boot camps, a 14-week startup accelerator programme, and a new scale-up programme for later-stage scaling enterprises.

Market Outlook for Cyber Security Insurance

The sector for cyber security insurance is estimated to earn the value of USD 90 Billion by the end of 2035 which was just about USD 14 Billion in the year 2022. This growth of the sector is at a rate of 27%.

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Conclusion

This concept of insurtech is new for every insure. However, in this growing age of digitalization, the need for technology advancement in this field is also necessary even though it has few disadvantages or difficulties. Government and all other institutions are making collective efforts to this change in the insurance sector. Yet it would require a considerable time for its growth. Hence, during this process in the growth of insurtech the organization is expected to maintain its security in order to build trust of the clients. Maintaining the cyber security of the insurtech would generate the greater revenue which is unpredictable but the sector would grow is determined.