Insurtech investment has been directed at the wrong places and instead of start-ups undermining established insurers, legacy companies are poised to exploit new technology and transform their businesses. The first wave is likely to be in health care, where insurers will use big data analytics to improve care for patients by identifying patterns that can help them tailor care. So far money has been sunk into streamlining processes and improving customer experiences, which won't lead to change, Twining wrote. Developing and deploying artificial intelligence and improving data extraction will be key to making that transformation, he concluded.
Insurtech investment has been directed at the wrong places and instead of start-ups undermining established insurers, legacy companies are poised to exploit new technology and transform their businesses. Consultant and former McKinsey entrepreneur James Twining said investment must be directed towards the biggest cost centres of the insurance value chain, risk pricing and claims, rather than distribution, an area that already has too many players in it. So far money has been sunk into streamlining processes and improving customer experiences, which won't lead to change, Twining wrote. Developing and deploying artificial intelligence and improving data extraction will be key to making that transformation, he concluded.