There is a wide range of innovations being explored in the insurance industry under the heading of insurtech. One such type of innovation is the use of robotic process automation (RPA) to perform internal tasks at traditional insurance companies, such as sales and claims processing (along with back office administrative tasks). Doing so reduces overheads such as labor and real estate costs, facilitating cheaper prices for consumers. Some new insurance companies have pushed this concept to its limit, only allowing online interactions with customers. One such ‘disruptive’ insurance provider in the United States and Europe is Lemonade, who exclusively use chatbots to handle customer service and claims. This business model has proved successful so far, with Lemonade’s revenue growing strongly from 2019 to 2020. A similar development has been seen in the Chinese insurance market, with online insurer ZhongAn's revenue also seeing strong growth.
Can insurance be totally automated?
While many believe insurtech is set to revolutionize the insurance industry, one of the insurance jobs least likely to be replaced by automation is underwriting. Underwriting automation means that the process of evaluating the risk of insuring a client will be performed by a computer, rather than a person. So far, even insurance providers at the cutting edge of insurtech have not been able to fully automate this process. For example, Lemonade digitally collects about 100x more data-points per customer than traditional insurers when establishing a policy, which are then analyzed using algorithms to improve the speed and accuracy of this process. However, human underwriters are still required to monitor the outcome, ensuring the company’s risk portfolio is balanced.
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In the following 5 chapters, you will quickly find the 33 most important statistics relating to "Insurtech".