It’s expected that the American life and non-life insurance market will grow from $2.02 trillion this year to $2.83 trillion by 2029, in terms of net written premiums value. Driving this increase, according to ResearchAndMarkets.com, is the growing use of InsurTech.
A subset and younger sibling of FinTech, InsurTech is the use of innovative technologies like artificial intelligence, big data analysis, cloud computing, wearables and sensors, and more, to enhance, improve and automate the traditional insurance industry.
“Pre-COVID, you could probably go to a FinTech event every week, but if you were an insurance person going to a FinTech event, you were pretty much an ugly duckling,” said David Gritz the co-founder and managing director of InsurTech NY, along with Tony Lew, who recently presented at the Big I New York’s GO BIG! convention in Syracuse.
Gritz and Lew founded InsurTech NY in 2019 to bring together carriers, brokers, investors, and InsurTech startups and to help them take advantage of the latest digital technology to improve efficiencies and increase revenue
“There are a lot of Main Street people that can benefit from some of the innovations coming out of the InsurTech space,” Gritz said. “And our hope was to raise the profile of those companies and help first facilitate those connections.”
While InsurTech is headquartered downstate, it draws insurance brokers and agents from across the country and state — including Rochester — to its events. It also has a corporate innovation program, competitions and accelerators, venture fund and a laboratory called the Digital MGA Lab where entrepreneurs and startups can develop and launch InsurTech products.
“There’s a lot of tools and technologies that are coming out now to help differentiate how people care for themselves and their family members,” said Gritz, citing an example of one of the areas InsurTech is growing – life and health. “So, for example, we had to start up that was in our lab, and they focused on studying people’s biological versus chronological age.”
By using tools to look at age through a biological rather than chronological lens, there can be advantages for the consumer.
“It gives a differentiated advantage to them to go buy insurance and it rewards them for the healthy choices that they have ultimately made,” said Gritz, giving smoking vs. nonsmoking as an example. “I think that’s where we see the most exciting technologies.”
Another emerging InsurTech area Gritz is excited about is satellite technology. A leader in this space is ICEYE, which participated in an InsurTech event called “Integrating Data to Save Lives – Wellness, Safety and ESG.”
“They essentially use satellite data to tell in the moment what’s happening in a storm, like which houses are likely to get hit and which ones were affected,” Gritz said. “It gives the ability for first responders to get out to people and but for insurance companies to prioritize the areas that got hit worse than others.”
Among the many other emerging InsurTech areas Gritz points to are machine vision; tools to help businesses drive down the costs of coverage; and artificial intelligence to help the industry with big data analysis, among other things.
“Insurance companies ultimately have billions of sets of data about things like people’s lives, assets and the markets,” Gritz said. “Having the ability to better analyze this data helps them substantially.”
Brian Allen, Rochester Market Leader and Commercial Insurance Consultant for Walsh Duffield Insurance Companies says this point in time with technology and insurance converging is indeed exciting, but also presents challenges as it changes so rapidly.
“We need to ensure that, if we decide to utilize the technological resources available, our agency and our customers will benefit from it,” Allen said. “We view implementing technology within our organization as a tool, not the solution. Insurance continues to be relationship driven and if technology can assist us in forming stronger relationships with our clients we will entertain it.”
Some of the technology solutions Walsh Duffield utilizes include insurance management software that provides specific data analytics to clients and assists the team in pre-filling out specific applications.
“This certainly helps us become more efficient but still needs the human eye to review what data is being pulled,” Allen said. “We also work with companies that integrate within our system and help us conduct proactive modeling and benchmarking for our clients. We are constantly discussing internally about what other technological tools may be out there to provide better service for our customers.”
In deciding which new technologies to implement, the firm asks “Does it make sense? How can we use this? Does it add value to our services that we provide our clients?” Allen said. They also make sure ideas are tested first before rolling them out to clients and ensure that new technologies being considered will enhance the relationship between the agency and clients, not remove or replace it.
“Insurance consumers don’t know what they don’t know and providing a consultative approach to purchasing insurance will always be important,” he said.
The agency belongs to an international best practices group of like-minded insurance agencies that meet a few times a year to discuss and learn from each other.
“This group has recently formed a specific IT group that is testing new technologies out there and providing practical recommendations on these systems,” Allen said. “Being a part of this group allows us to hear from others what challenges the agencies are facing after they implement the specific new technology.”
Caurie Putnam is a Rochester-area freelance writer.
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