The insurance industry has progressed rather nicely on the convergence of various technologies, such as artificial intelligence (AI) to boost automation, blockchain and the Internet of Things (IoT), driven by increased competition among insurtech companies.
In recent years, there have been over 2.4K startups engaging in providing software and data solutions for the insurance industry, and at least 30 unicorns.1 In 2021, the life insurance industry saw an 81% increase in investments in insurtech globally, as depicted in the chart above.2
With the rise of smartphones and digital applications, customers increasingly want the ease of use, clarity, instantaneous and 24/7 access to service. AI, for example, can be applied to underwriting or streamlining claims.
Blockchain allows for cybersecurity, smart contracts and advanced automation — increasing trust and speed and reducing costs by reducing or eliminating excessive paperwork, intermediaries and fraud. Regarding the IoT, using data from internet-connected devices such as activity trackers or smartwatches, consumers own an average of four connected devices, with 127 new devices connecting to the internet every second.3
The potential is exciting. Data from connected devices can greatly help increase the understanding of risk. For example, at the height of the pandemic, researchers at Stanford University School of Medicine and Case Western University analyzed data from activity trackers such as Fitbits and Apple Watches and found that it was possible to detect cases of COVID-19 days before a participant had symptoms or a diagnosis.4
Currently, most activity trackers and smartwatches capture at least basic data on heart rate and sleep and activity patterns. Apple’s Series 7 tracks blood oxygen, has an electrocardiogram (ECG) feature and offers fall detection that will automatically call 911 if it detects the wearer is not moving.
In the future, other types of wearable devices may be readily available and used to capture different health or quality-of-life measures such as cholesterol, cortisol levels for stress, or blood sugar levels. Implantable devices can be used to deliver medication, making it easier for consumers to monitor, manage and maintain their health and for insurers to offer more tailored and innovative policies and services.
I’m excited to follow these developments in the coming years. I wish you a very wonderful holiday season and a happy new year.
1Source: InsurTech- Top 10 Insurtech Unicorns 2022; 11/1/22
2Source: Boston Consulting Group- The Funding Streak in Insurtech Continues; 6/8/22
3Source: McKinsey& Company- What’s new with the Internet of Things?; 5/10/17
4Source: Nature Electronics- Wearable devices for the detection of COVID-19; 1/25/21
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