There seem to be endless combinations of a prefix combined with ‘tech’ that make up today’s start-up landscape. From the more well-known fintech, to techs that cause pause, like proptech or insurtech.
Insurtech, or insurance tech, refers to technology innovations designed to maximise savings and efficiency from the current insurance industry model.
Arabian Business talked to Neeraj Gupta, the CEO of insurtech policybazaar UAE to see how the tech player is shaking up the insurance industry.
What role does insurtech play alongside traditional insurance offers?
So if you look at the traditional way of insurance, it’s a basic concept. You try to understand the risk, price it, and write it. Now the insurtech helps you do that from a digital perspective in a much better and more precise manner.
With insurtech, we’re typically trying to give more detailed data that helps the industry price the risk better. At the same time, it makes insurance, or the product, simpler for consumers.
Otherwise, if you look at an insurance policy from a traditional standpoint, the consumer is a bit away from it, and there is no understanding if this product fits in well.
That is where the insurtechs are coming in – they’re helping demystify insurance. They’re making it simpler, more reachable, and more understandable.
On the role of insurtech versus the traditional players, is it more competition based or collaborative, or is there space for both of those things?
I believe both will try coexist. There are certain risks.
Maybe traditional providers may write the insurance better, but it requires a lot of interaction, and a lot of back and forth with the consumer.
Whereas from an insurtech perspective, more products, which are more protection-driven, will start with data. The insurtech is really trying to simplify the process of buying insurance and curating a product.
But there will be a set of consumers who will look for a more traditional way of interacting with providers.
You mentioned that with insurtech, you can give more data. So how do you get that data? Where does it come from? And what does it tell us beyond the traditional insurance?
Simply putting data in a digital form helps you analyse it much better in real-time.
Typically, if you look at how data was collected in insurance, you would have those lengthy proposal forms, where a consumer would typically just sign a document and one of the distributors would fill it in, and then the data would flow in physical forms.
At least now that has been captured digitally. So you can in real-time, analyse it, and underwrite it in real-time.
The other aspect is there are a lot of other data points recorded from the start.
If you look at health now, a lot of health and wellness data is being recorded. It’s the same thing with apps that record how the consumer is driving, how they’re breaking and accelerating – and it gives more peripheral data around how the consumer behaves. That can be tied in with how the insurance behaves.
What are the main challenges in the insurtech space?
We need to understand where the insurtechs are coming from. We are essentially trying to simplify the existing processes. The first challenge we used to face as an insurtech is convincing manufacturers that the new process might help iron some things out.
Also, as an insurtech, we believe in trying out new things. Where insurance typically works on historical data, sometimes those datasets are missing, and you may need them to build something new.
But if I look back, I can see the challenges are becoming smaller. A lot of the players are looking at this field to help the manufacturers or the reinsurers. They’re partnering with insurtechs to look at ‘how do we get from point A to B faster’.
But like in any industry, some challenges will remain.
What’s the best way to overcome those?
See, I believe the objective needs to be very clear. We need to look at what we really want to achieve. For us at policybazaar, the consumer was a clear strategy. We wanted to focus on the consumer, understand the pain point, and continuously try to solve that. And if we are very clear with that, then I believe the entire ecosystem starts to fall in place. You have to be persistent with that, right.
