The digital revolution in insurance is about to begin its second act.
Having in its first phase used science and technology to inspire a rethinking of insurance that is making insurance easier and more efficient to buy and sell, and improving customer experiences especially around claims, insurtech is poised for a dramatic sequel that will build on the first act theme that challenges present opportunities.
Products will have a starring role in the second act. Advanced technology and data will be used to design simpler products that better serve people’s real needs, according to experts at the third annual InsureTech Connect Conference in Las Vegas. The tools and data will also be used to more precisely assess and price risk.
The second installment will feature key roles for both incumbents and startups, along with cameo appearances by some new business models.
Seeing the Core
What has happened thus far in the first act is “just the tip of the iceberg,” according to Daniel Schreiber, founder and CEO of the pioneering insurtech insurer Lemonade.
The second act, which Schreiber calls “Deep Seeing,” will revolutionize core insurance products and pricing. He said the second act will have a profound impact as it deploys artificial intelligence (AI) and machine learning along with predictive modeling and nontraditional data sets.
“The next insurance leaders will use bots, not brokers, and AI, not actuaries,” he proclaimed to the audience at the ITC.
According to Schreiber, the core product of insurance is essentially an algorithm and thus, unlike most consumer products, is susceptible to being reconfigured by new data practices. “Insurance is about using statistics to price risk, which is why data, properly collected and used, will transform the core of the product,” he said.