Insurtechs: what is it?
More and more disruptive fintechs are currently appearing on the market, taking the service and banking segment by storm. A change can also be observed in the insurance industry in this context – this is being driven forward in particular by the so-called InsurTechs. InsurTechs are active in various segments in this respect.
For example, one of these innovative InsurTechs is Coya. The company offers digital insurance, such as dog health insurance or home insurance. What is behind the business models is explained in the following article.
InsurTechs can be found in these segments
The InsurTechs category generally includes services in the insurance industry that make use of modern IT methods in terms of their offering and implementation. As a rule, the term forms the short variant for the term InsurTech startups.
InsurTechs are particularly common in the health insurance space. The startups obtain data from innovative sources such as smart wearables or smartphones. For example, insurance rates can be offered that are based on the individual physical activity of the customer.
In the peer-to-peer insurance segment, policyholders join forces and support each other financially in the event of a claim. The peer-to-peer segment is currently enjoying the most popularity among InsurTechs.
In addition, there are also online providers that carry out their business activities in the traditional broker segment. In the course of contract management, brokerage mandates are thus predominantly handled online. In contrast, InsurTechs in the spot insurance segment are focusing on short-term insurance in various areas. For example, special car insurance policies are offered for a period of just 24 hours.
The different types of InsurTechs
There are InsurTechs that have a broker mandate from their customers. This enables them to conclude, manage and terminate contracts on behalf of customers like a traditional insurance broker. Other InsurTechs do not make use of this option.
Roboadvisor InsurTechs make use of Big Data, algorithms and artificial intelligence. Data is evaluated via software programs and thus constantly provides customers with new product recommendations or optimization potential for existing insurance products on this data basis.
If InsurTechs take over the management of a customer's insurance contracts, they act as digital contract managers – either with or without a mandate. In addition, there are also InsurTechs that develop their own insurance products and offer them on the market. In some cases, they cooperate with existing insurance companies for this purpose. In addition, there are also InsurTechs that merely settle the claim in the event of an insurance claim.
What is important when selecting InsurTechs??
Generally speaking, when choosing an InsurTechs, the first offer is not necessarily the best offer. Also in this innovative insurance area, a comprehensive comparison of the different providers should therefore be made. Many of the InsurTechs and the products they offer are still new on the market. It is therefore not easy for consumers to understand whether they are really serious. Independent test results, however, provide a helpful first point of reference.
The InsurTechs' services are mainly offered and managed digitally. For this reason, data security is of paramount importance. For example, consumers should check whether the provider uses data encryption and security certificates. The server location of the InsurTech should also be within Germany or the EU, if possible.
It is also recommended that the InsurTech grants different options for payment. As with traditional insurance providers, consumers should be able to choose the intervals at which they want to make their premium payments