What is insurtech?

What is insurtech? And why did it grow so fast, attracting $4.5 billion in investment in 2023?

The simple answer: Insurtech helps you focus on value (like Warby Parker), personalize (like Netflix), and create more efficiency (like Amazon). Yup, Insurtech is the tool that does it all. With insurance agency management software, everyone — from underwriters to brokers to policyholders — immediately benefits.

Insurtech is the best way to prepare for turns in the cycle and be ready for whatever comes your way. Who is engaging and investing in insurtech? Anyone who understands that staying one step ahead is no longer optional for truly competitive companies. Insurtech is now a must-have.

The result of building a modern tech stack using the right insurtech can include things like:

• Policies are faster with artificial intelligence (AI)
• Managing routine service inquiries is quicker with workflow automation and smart chatbots
• Seamless claims submission and processing with mobile apps and real-time data delivery

From traditional insurance companies to spry startups, insurtech is already spurring huge changes wherever you turn — surprising some who viewed the industry as slow to change and evolve. But carriers and brokers now realize that insurtech holds the power to help them build lasting, more satisfying relationships with clients and policyholders – especially as we gear up to integrate automation and AI into our workflows. And they know how to do it while navigating complex regulations and maintaining the highest levels of financial ethics.

Insurance technology can be the driving force for innovation in an industry with a reputation for loving paperwork. Insurtech frees carriers and brokers to solve problems more efficiently — and be more human —simply by implementing and integrating AI, automation, and data. Less paperwork, more engagement.

Trends in tech are driving insurtech change — and these tech innovations can actually make some insurance interactions delightful. Verspieren, a major insurance broker, created a program allowing shoppers to instantly buy warranty insurance on their expensive purchases. That means near-instant quote-to-bind – just two minutes. And that’s digital innovation enabling simple, automated shopping experiences to give customers peace of mind, sans paperwork.

These moments are game-changing for the insurance industry. You can see why investors are so enthusiastic about insurtech. The benefits of insurtech include elevating service, streamlining distribution, and collecting data for impactful analysis. It’s the ultimate virtuous cycle – delight, collect data, and do even better the next time. And do it on any channel. Slack. Email. A phone call.

“We’ve built a holistic self-service experience, especially in our contact center where customers can do simple tasks,” said Stacey Goodman, chief information officer of Prudential Financial. “Additionally, we’ve built other capabilities around artificial intelligence, machine learning, natural language clouding, chatbots, and more to further our goal of being tech-forward.”

With the right insurance technology, you can streamline business processes and enable anywhere-anytime collaboration. And orchestrating cross-channel communication allows everyone in your organization to gain visibility for an even better carrier-agent-customer relationship.

Let’s look at Pacific Life. The insurance company didn’t get to be as dominant after 150 years as it has become without focusing on what’s coming next. Strictly speaking, Pacific Life isn’t an insurtech, but it’s a company focused on digital-first strategies that foster innovation.

Like other long-lived competitors, insurtech is at the heart of Salesforce Trailblazer Pacific Life’s strategy. Indeed, 80% of insurance leaders say their business and technology strategies are inseparable. No surprise, then, that Pacific Life Chief Operating Officer Adrian Griggs focuses on upgrading the customer and broker experience through technology.

“We believe the next 10 years will see more change than the whole 150-year history of our company,” said Griggs. “The effective integration of channels across marketing, sales, and service activities is critical to delivering a positive, brand-reinforcing experience at every touchpoint in the customer relationship.”

Financial Services Cloud was Pacific Life’s customer relationship management (CRM) tool of choice, with the goal of offering customers a retail-level experience. This enabled the carrier to work more effectively with independent agents and customers via a 360-degree view of their data. For example, using CRM Analytics, the carrier made data-driven decisions to determine the next-best actions with the support of AI and intelligent data visualization. Next up on its business plan: Connecting with customers and brokers on their preferred channels – email, chat, social, text, or phone.

Insurance industry trends can help carriers grow — and scale quickly — with the right tech. Take, for example, Salesforce Trailblazer AAA Carolinas. It needed a strategy to add some spice to attract the attention of millennials and Gen Z. The nonprofit has an array of services to offer drivers as they explore the world, but realized it needed to reach the next generation.

AAA Carolinas had built its business around services and products. Its leaders realized they needed to put the customer at the center of their efforts. To do that, AAA Carolinas introduced technology innovation that would put all customer data into one place so everyone in the organization could have a 360-degree view of its users. The new technology enabled the nonprofit to introduce LiveAgent, an automated chat, for online support. This helped to increase member engagement by 330% and reduce service response time by 54%.

AAA Carolinas also automated ways to flag new sales opportunities when members transferred from one region to the next. This generated around 1,250 new opportunities per month and is estimated to drive $99,000 to $200,000 in additional gross revenue annually. With the help of Salesforce Program Architects, who provide strategic planning, deep industry and product knowledge, and on-the-ground technical advice, AAA Carolinas electronically linked the organization to Edmunds, the car value database. Sales reps could spot potential safety issues for members and notify them of service needs.

Claims may be the most challenging area for carriers and brokers. If an individual or business is filing a claim, something has gone wrong for them. They don’t need cumbersome paperwork or clunky claims systems to make things feel worse.

Using an insurtech-based claims platform, Farmers Insurance was able to reduce first notice of loss by a whopping 75%. Farmers used insurtech in its claims management system to create a platform reducing loss-reporting time from 12 minutes to 3 minutes. Policyholders can file a claim on their computers or phones; send in photos; find repair shops, and connect quickly with an adjuster more efficiently than buying groceries. Farmer’s also uses new technology to automate routine tasks so agents can spend more time with customers.

The innovations your competitors are undertaking mean that insurance technology is now an imperative. As markets and the economic outlook continue to change, you need the right technology to create the best experiences possible for your policyholders and clients.