Get in touch →

Why Insurers Hesitate Adopting InsurTech Solutions?

InsurTech offers many useful innovations to the insurance industry. However, there are barriers prevent the technology from being more widely adopted.

It is a known fact that InsurTech can change the insurance industry and make it better and more customer oriented. Insurers across the globe acknowledge the value of InsurTech. Unfortunately, very few actually adopt it. This was confirmed by a survey of FRISS, insurance fraud detection technology provider.

The results of this survey show that only 19% of insurers have already invested in InsurTech. Even though 88% of insurance companies’ owners were convinced that InsurTech adoption offers great opportunities and half of them were found working on InsurTech apps or conducting experiments with the apps, lots of companies still hesitate.

Moreover, the study found the adoption of online channels by insurers more difficult than anticipated. In addition, 69% of insurers currently have some form of online distribution. However, the figure marks a rise of only 4 percentage points since 2016.

What Challenges Impede Adoption of the InsurTech?

The use of Digital transformation technologies, such as the artificial intelligence (AI) has been a game changer in the whole industry. It’s a new way of working with a broker to ensure the best possible policy written for a the company. Some companies also implement apps, which could effectively create on-demand insurance for situations like borrowing a friend’s car. The adoption of a peer-to-peer model can also be used to create customized group coverage and incentivize positive choices through group rebates.
Investing in the InsurTech related projects can be an opportunity for insurers to expand their products and services, increase their customer base, and leverage their analytical capabilities.

Nevertheless, while many of these innovations have been desperately needed, they’ve also come with their own sets of challenges. This industry is stable and isn’t looking for novelty; companies play on caution, which means many of them turn away from all opportunities offered by InsurTech. According to PwC research, just 43% of insurance businesses state that Fintech (and Insurtech as well) is at the heart of their business.

Want to get a significant competitive advantage in the insurance market?

Contact us →

Another challenge: many startups still require the assistance of a traditional broker to take over the task of underwriting and to manage catastrophic risk. The experts predict the startups will eventually warm to the hearts of big players in the insurance industry. However, it’ll take a little more time than expected. ” Startups with little or no prior knowledge of the insurance industry struggle to quickly demonstrate their value proposition”, claims Renaud Million, co-founder & CEO of SPIXII. This is where insurance companies and InsurTech startups usually realize they need each other. Despite their fundamental differences.

One more inevitable challenge: regulations. Insurers are faced with two big regulatory challenges. First, new capital regulations that were designed for banks but have been applied to insurance (such as the need to have more capital in reserve to survive a financial crisis). Second, the strong push for global standards. Insurers are often reluctant to embrace new products and services out of concern of navigating these complex compliance and licensing requirements.

The lack of urgency is another challenge meet by InsurTech. “New technologies are reducing losses and costs while saving lives and increasing customer satisfaction, increasing risks and driving new business models and consolidation within the industry. New advances such as driverless cars, machine learning, home sensors and ‘robo-agents’ empowered with artificial intelligence offer a world of opportunity for insurers,” said Gary Reader, Global Head of Insurance, KPMG International. Insurers are slow to move because they, “Lack the hallmarks of an innovative organization, such as dedicated budgets for innovation, formal strategies, executive-level support, and performance metrics.” The challenge, as pointed out by Clay Christiansen in his book “The Innovator’s Dilemma” is that those who resist change, or rest on past approaches are on a slippery slope to mediocrity and a slow decline.

New technologies, and those that adopt them rapidly, are shown to maintain the highest profit margins.

Adopt insurance tech solutions with a reliable partner. Contact info@computools.com for more details.

Computools is a full-service software company that designs solutions to help companies meet the needs of tomorrow. Our clients represent a wide range of industries, including retail, finance, healthcare, consumer service and more.

Contact us →

Our services

Clients trust us for our clarity, structure, high performance rate and intuitive functionality across every stage of the software development process

01. Product Consulting & Design

Create the right product development strategy, design a valuable user experience and system architecture for your digital product.

product consulting:

01. new product’s idea validation

for

BSBusiness Size:

Startups

&

Roles:

CEOChief Executive Officer

POProduct Owner

02. business intelligence

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

&

Roles:

CEOChief Executive Officer

COOChief Operating Officer

CIOChief Information Officer

03. Process Automation

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

&

Roles:

CEOChief Executive Officer

COOChief Operating Officer

CMOChief Marketing Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

Product Design:

01. User Experience Design

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CMOChief Marketing Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

02. User Interface Design

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CMOChief Marketing Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

03. Software Architecture

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

04. Quality Assurance Strategy

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

05. Delivery strategy

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

POProduct Owner

06. Project Management Flow

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

02. Product Engineering

Develop your digital product based on a ready-made product development strategy, UX design and architecture.

front-end development:

01. Web front-end development

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CMOChief Marketing Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

02. Mobile App Development

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CMOChief Marketing Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

03. Software Testing

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CMOChief Marketing Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

back-end development:

01. web & mobile back-end development

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

02. Cloud & Devops

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

03. Test Automation

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

CEOChief Executive Officer

CIOChief Information Officer

CTOChief Technology Officer

PMProject Manager

PMProduct Manager

POProduct Owner

03. Dedicated Delivery Teams

Increase the speed and quality of software development by introducing our dedicated team of professionals to your project’s software development process.

Dedicated Delivery Teams:

01. Create the team

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

POProduct Owner

PMProject Manager

CTOChief Technology Officer

CIOChief Information Officer

COOChief Operating Officer

CEOChief Executive Officer

02. Expand your team

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

POProduct Owner

PMProject Manager

CTOChief Technology Officer

CIOChief Information Officer

COOChief Operating Officer

CEOChief Executive Officer

03. Recruit of top experts

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

POProduct Owner

PMProject Manager

CTOChief Technology Officer

CIOChief Information Officer

COOChief Operating Officer

CEOChief Executive Officer

04. Add new expertise

for

BSBusiness Size:

Enterprise

SMBSmall Medium Business

Startups

&

Roles:

POProduct Owner

PMProject Manager

CTOChief Technology Officer

CIOChief Information Officer

COOChief Operating Officer

CEOChief Executive Officer

Related Articles

Explore all
Articles
Get a
consultation
from our experts!
Contact us →