How technology can save the reputation of the insurance industry

Cover Genius co-founder and chief Angus McDonald. Source: Supplied.

Commissioner Hayne’s final royal commission report has cast an overdue light on the finance sector and opened the door for industry-wide change.

Change is nothing new to insurtechs — technology-led companies in the insurance sector — who have been challenging the established players, forging their own paths and driving towards a fairer, more customer-focused insurance landscape for a few years now.

A recurring theme cited in the royal commission report was the poor treatment of insurance customers, who for too long have been ripped off by confusing policies, bullying sales tactics, slow claims processes and inflated rates.

These practices have further eroded trust in the insurance industry, which can prove detrimental when you consider that Australians’ trust in business already teeters at 52%, according to the 2019 Edelman Trust Barometer.

The result of the royal commission echoes what we’re seeing across many industries: customers want simple, convenient solutions that fit their modern lifestyles. Insurtechs are making these customer expectations the driver of their technology and product development, solving customer problems and adapting to their evolving expectations.

While the incumbents of the insurance industry wrestle with the report’s recommendations and how they overhaul their business model, insurtechs are already meeting the wants and needs of customers by utilising the sheer volume of data available today to offer them unique data-driven products, seamless experiences and personalised product recommendations.

Insurtechs’ use of technology is tackling customer pain points and enhancing customer experience with straightforward, easy-to-read policy documents and instantaneous claims.

For example, where 20 days is the industry average for payment processing, insurtechs are delivering instant payouts. In turn, this experience is giving customers peace of mind, renewing faith in the value of insurance and rebuilding trust in the industry.

We are already witnessing the rising influence of fintechs, disrupting the finance industry through tech-driven innovation and forcing banks to digitise and embrace mobile banking to keep up with changing customer expectations.

Insurtechs are a little behind, but they’re becoming as prominent and trusted as fintechs.

In this sense, the rise of insurtechs could be seen to pose a competitive threat to incumbents, but it can also present potentially valuable opportunities to partner and drive innovation together; ultimately raising the industry standards and user experience for all concerned.

With the industry now having to become more customer-centric and transparent as a result of the royal commission, a sizeable challenge has been put to Australia’s big insurance players to keep up with insurtechs.

All eyes are now on the insurance industry to see who will respond to the disruption by embracing forward-thinking digitisation and technology

Insurtechs are blazing the insurance industry trail by showing incumbents the disruptive power of tech in simplifying the customer experience, and partnering with them directly to steer the transformation of the industry.

However it happens, it’s the customer that will reap the ultimate benefit of a rapid insurance experience that is simple, transparent and fair.

NOW READ: How a new approach to insurance saw Sydney startup Huddle secure 700% revenue growth — and a $19 million investment

NOW READ: Why the royal commission is good news for startups

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