Insurers have many measures for success such as the combined ratio and retention rates. Given the strong (actuarial accurate!) focus on profitability, it is surprising how much leeway insurtechs have been given in terms of tangible results. A recent article, indicates that situation may be changing. True innovation such a policy customization, exposure visualization, and risk sharing need to be priorities. The current focus on on-line quote and price comparison applications contribute incremental improvement but not material digital transformation.
Embedded insurance technology offers the real opportunity to change the nature of the insurance transaction. An AI-driven insurance product configuration application that offers tailored policies aligned with the customer purchase is an example of rethinking insurance distribution models. Already, warranty insurance products are sold through big-box retailers. Extend this model to include an application that recognizes when the policyholder buys an expensive home theater product and makes a recommendation to increase their homeowners limits. As a wise person once said 'This is the way.'