The rise of insurtech is reflected in the amount of column inches devoted to new technology and its power to transform one of our most conservative industries. Not known for innovation, insurance is slow moving, labour intensive, bound by tradition and convention. But if the current media focus on disruption is anything to go by, insurance is on the threshold of big changes and is ready to embrace a digital future.
But who will help to make this happen, and how will insurers stay ahead of the growing wave of technology startups and challenger brands? The debate was joined in last month’s Raconteur Insurance supplement*, distributed with The Times, which provided a snapshot of the issues and players in a changing industry. In this article we comment on some of the trends covered in the supplement, and provide RDT’s vision for the future.
A key theme of the editorial was that although there is a wealth of data available, both structured and unstructured, and a host of digital resources and analytical tools that promise to turn straw into gold, insurers are struggling to find their way – a fact underlined by recent PwC research that found that while 74 per cent of insurers believe their business is at risk of disruption, 32 per cent are not yet engaging with technology firms on any level.
For insurers, the devil has always been in the detail. Reliable, dependable Information is the lifeblood of profitable underwriting, and today’s technology can turn information into meaningful insights about customers and risks, which can boost the bottom line and increase customer loyalty. But how do you apply technology? How do you build a digital insurance business that puts you in control of distribution and provides a level of risk management that was previously not possible?
Some insurers (the 32 per cent identified by PwC) still cling to traditional business models. Perhaps this is because they are yet to be convinced by big data and the internet of things, but more likely because they don’t have the skills to take the first step. Others, especially larger carriers, are focusing on their own incubators and accelerators. And then there is the growing breed of standalones – ambitious startups funded by venture capitalists and now competing with incumbent insurers. Among the examples quoted were Lemonade, which has secured $13million from investors, and Friendsurance.
If established players are to succeed in an increasingly digital market, they need to be confident and assured innovators. And the best way to innovate successfully is to form partnerships with experienced insurance specialists – not the hopeful and hungry startups or the many financial services providers who are keen to push their fintech offerings in the insurance space. Instead insurers need technology partners who are industry natives, companies that understand the business from the inside and can provide insurtech that is grounded in a deep knowledge of the entire insurance cycle.
RDT is just such a company. It has been providing insurance systems and solutions for more than 25 years, and pioneered many of the technologies that are now standard. For example, in the 1990s it created the first website that allowed real-time purchase of motor insurance. More recently, RDT’s data orchestration platform Equator was the first truly centralised rating product to enable real-time manipulation of rates based on data enrichment.
RDT is a proven insurtech specialist with roots formed long before the internet boom. It has grown up with the technology revolution and worked closely with many of the leading insurance brands. Collaboration combined with inside knowledge is what makes it different, and its products are developed in an agile software environment that brings it even closer to its customers. This can be seen in its collaboration with Markerstudy which led to the creation of Equator. Within 18 months of launching Equator, Markerstudy doubled its number of policies, reduced its loss ratio by 3.5 per cent and cut application fraud by 80 per cent.
If there’s one thing the Raconteur supplement demonstrates clearly, it’s that the insurtech field is not short of players and industry-changing ideas. Agile startups, venture capitalists, fintech vendors selling their wares in a new marketplace, blockchain, telematics, artificial intelligence – these are just some of the strands shaping the future of insurance. And into this mix RDT provides one of the strongest and most reliable platforms to build a truly innovative digital business.