Has insutech accelerated the extinction of insurance intermedieries?


#1

The use of technology in insurance has resulted in information being readily accessible with a click of a key on a laptop.In rescent years information assymetry between insurance companies ,brokers and the consumer has been largely cut down. Insurtech has played a huge row in globerlization which had resulted in countries seperated by thousands of miles reduced to a simole click on the internet.

Insurance companies can now acces the Reinsurance market in any country of their choice but developments of fraudulous activities has also increased. Bancassurance is a market which has taken advantage of technology making it difficult for insurance agents to get business as banks have become a 1 stop shop for consumers to do all transactions at once.Smart technology has also made life dificult for insurance brokers as it can now cypher information online and come up with a large enough sample size to create new business classes leading to insurers not to depend on intermedieries for innovation.

Insurance agencies are facing dificulties as their marketing tactics cant be compared to for example insurance adverts pop ups on the internet and that is proving telemarketing covers a larger surface area than agents and its a lot cheaper.

Technology has also acted as a catalyst and other insurance sectors are taking advantages of this techno.Reinsurance brokers can now get business not only limited to one market but every corner of the world.The row played by agents cant be easily pushed over because techno lacks the physical presence, the ability to explain judging from the reaction of the client,negotiating contracts to tailor suit the consumerTechno has also created investment vehicles for insurers to model risk into mathematical fomulaes and can be traded on stock markets leading to creation of new business in areas 50 years ago the insurance sector rejected such risks but now it is a reality eg cyber risks or clients with life theatening illnesses.

Islamic insurance (Takaful Insurance) has also helped religious people who dont believe in traditional insurance not to feel insecure because of lack of insurance.This as a risk management tool is now available because of globerlization and both industries takaful insurance and traditional insurance to learn from each other with the same goal in mind.

Technology has allowed us to accurately predict catastrophic disasters, cut down on moral hazard, decision making in morale hazard , accurate calculation of insurance premiums etc, the list is endless.

We look forward in new developments in insurtech as we can only embrace the ever changing world.


#2

@william strong point you raised there on techno cant replace the phschology and physical presence of a person in marketing a product in person rather than talking to a robot online


#3

Thank you Sir for the observation.There is no better way of marketing a product than a strong customer relationship.eg sending your client his favourite wine,flowers, chocolates on his/her birthday.making them feel to be part of the organization.


#4

@william you are right information assymetry is slowly becoming a thing of the past and agents and brokers should be pro-active rather than reactive in their way of doing business thats why the insutech market is slowly being absorbed by the banking sector.


#5

@Nick you are 100% correct ,insurance industry is a little reluctant when it comes to being proactive eg most of the products have been in existancw for over 100 years now.Todays world is filled with unpredictability eg countries which had never experienced earthquakes and tremors are now focal points of them, deserts are spreading by each day the North pole is melting in that alone you can understand why financial intermedieries need to be pro-active .with technology being a catalyst it is much easier to be proactive


#6

@william, thanks for the excellent post to the Genome! You cover a lot of areas of the value chain and you hit a lot of good points.
You mentioned reinsurance a couple of times - I think this will be one of the more interesting dynamics to see take shape. Reinsurers will no longer just serve as a backstop to insurers (I know they do more than this already…!), but they will also (As we have already seen) take some more active roles in going direct to consumer.
To your point on physical presence, I will echo @Tobias in saying spot on there. Tech will also be able to give these agents/advisors some better tools which will allow them to service their policyholders better and more professionally. There will be some enhancements and continued opportunities in D2C products too, but I don’t think you will ever be able to replace the agent/advisor fully.
All in all - exciting times ahead!


#7

@Tobias @william @StephenGoldstein @Nick Here is a link to Stephen’s excellent post on this subject - using tech to augment rather than replace agents: