Small insurer technology is a burgeoning space. New developments happen almost daily. To help keep track of what’s what, we’ve captured a set of frequently asked questions that we hear from small insurers on a regular basis. We’ll keep this post updated so that you’ll always be able to find the latest information.
Last updated: Jan, 18 2024
What is insurtech?
Insurtech is the use of modern technology innovations designed to unlock cost savings and efficiencies from within the current insurance industry model.
Companies – particularly those that are not mega corporations – are taking advantage of new innovations to better meet the needs of agents and policyholders alike. They’re processing claims more efficiently, underwriting quicker and more accurately – all at a stunningly fast and cost-effective pace that doesn’t overtax their staff or take eons to implement.
What does digital transformation mean for the insurance industry?
Digital transformation in the insurance industry involves automating manual processes like billing, payments, knowledge sharing, reporting, onboarding and more, so that team members can focus on delivering value and driving growth.
These digital transformations accelerate revenue realization, move policyholders through the buying process at a faster rate and ensure that quotes are bound quicker. They also formalize processes, facilitate internal knowledge sharing and silo prevention and collaboration.
Digital transformation in the insurance industry impacts reporting as well. Instead of relying on multiple systems for various reports, small insurers can apply digital transformation best practices to connect data sources, scale up analytics and improve decision making. Through digital transformation, small insurers can improve underwriting accuracy, avoid unnecessary or bad risk and rate more accurately – often without having to engage a third party, or make updates to software code.
How can I use technology to compete against larger insurance carriers?
Modern technology can help level the playing field for small insurers. Yes, large insurers have the resources it takes to build custom, new technologies, but when it comes to implementation, they often do so slowly. For large insurers, a single change can impact dozens of business units across multiple countries. They have to deal with extensive documentation, training, troubleshooting and a dedicated support system. New tech implementation at a large insurance company can take months, if not years.
Small insurers, however, are nimble by design. They can typically implement new tech exponentially faster than their bigger competitors. Fewer people, fewer systems, fewer business units and fewer geographies make implementation easier.
With modern technology, small insurers meet the digital expectations of their agents and policyholders. Agents appreciate having the tools the need and policyholders value an insurer that makes everything from claim management to bill paying easier.
Lastly, modern technology helps small insurers protect their business by accelerating claim close rates and therefore reducing the chances of a claim spiraling out of control.
As a managing general agent, or MGA, how can technology help me grow my book of business?
For MGAs, modern policy administration software can help automate processes and reduce overhead, facilitate direct-to-consumer strategies and expand territories with greater ease.
When it comes to technology, what do insurance agents want from their carrier?
When it comes to technology, insurance agents want two things from their carrier: ease-of-use and efficiency.
Rarely do agents want a white-glove hand-holding experience from their carrier. They typically only seek that sort of support when they are faced with something unusual or challenging such as a big risk that they’re trying to quote, a large endorsement or a mid-policy change.
Most of the time, insurance agents value throughput. They want to generate a quote, bind it into a policy without minimal back and forth between the underwriter and the insured. They want to see loss reports and commission reports. They want to speak knowledgeably to policyholders and answer questions quickly and efficiently.