Insurtech is often framed as a force of disruption in the insurance industry. But technology doesn't disrupt the industry - it enhances the way carriers and customers interact. In 2018, I predict we will continue to see more carriers and agents embrace technology and partner with insurtech companies, not compete with them.

More carriers will also incorporate data and machine learning and offer on-demand insurance products in the coming year.

Partners, Not Adversaries

Insurtech is about improvement. Agents will still be the primary distribution force for insurance over the next 20 years and carriers will still be the primary capital for the next 20 years. None of that will radically change.

But as we move forward, carriers will realize they can form mutually beneficial partnerships with insurtech companies. This will help them leverage technology to improve end-to-end user experience for both customers and agents.

I always remind carriers that insurance isn't their product - customer experience is the product. If they can optimize the experience, they will come out ahead. That's one of the many areas where insurtech firms can help.

Data and Machine Learning

Our company, Insureon, works with seven of the 10 biggest carriers in the country, and across the board, we see them turning to technology, data and machine learning to improve their businesses. I predict that in 2018, the insurance industry will make better use of technology and artificial intelligence and more fully integrate both into their systems.

Machine learning is already improving the insurance buying process in many ways. Chatbots help customers complete applications, while machine-learning models for scripting help agents give advice. Machine learning can also help carriers analyze data to better understand customers and sell them the right products.

Carriers that resist incorporating technology into their business model will get left behind. They simply won't be seen as innovators and may even start to see their bottom line dip. Carriers need technology to make them more efficient so they can better meet the evolving needs and demands of customers.

On-Demand Services

The rise of the sharing economy has increased the desire for on-demand services. Consumers expect an instantaneous buying process for every need, and that includes insurance. The insurance carriers that will succeed in 2018 are the ones that can offer on-demand insurance products.

Take Metromile for example. This company allows drivers to pay for coverage based on the actual miles they drive. Meanwhile, the home insurance company Lemonade demonstrates that instant renters and homeowners coverage is feasible.

While traditional carriers may not be able to offer the same type of on-demand coverage as smaller insurtech startups, they can streamline the insurance buying process.

I predict many carriers will move to a more simplified, mobile-friendly application, similar to what insurers like Trōv and Cuvva offer.

However, despite simpler and shorter applications, we won't see agents disappear from the picture. Our firm strives to be the most technically driven, advice-oriented agency in the U.S., and every one of our customers still talks to an agent.

Carriers that succeed in 2018 will be the ones that successfully merge technology with agent interaction to create the best possible experience for customers.

By tapping into the tech advances insurtechs offer, savvy carriers will be able to reduce costs, improve the customer experience and boost the bottom line in the coming year.

 


About Ted Devine

Devine is the CEO of Insureon, an online small-business insurance agency. Prior to joining Insureon, Devine held several senior executive leadership positions at Aon Corp., including president of Aon Risk Services and CEO of Aon Re. Before joining Aon, Devine spent 12 years as director of McKinsey & Company.