From Nokia Bricks to Modern iPhones: Why Has the Insurance Industry Failed to Fully Embrace Technology and What Can be Done to Change That?
Written at Jul 31, 2023 2:06:56 PM by Ailsa Wedderburn
As a graduate business analyst, I was excited yet hesitant to take on the challenge of writing a blog for our LinkedIn page about the insurance industry. When I initially started brainstorming ideas, it was January and so my first thought was to talk about some of the recent trends in the field. After doing a bit of research however, I noticed that there seemed to be one theme that kept popping up in all the articles I read – InsurTech or Insurance Technology.
Before joining Distribind, I was familiar with the concept of Insurance as I had taken out travel and car insurance policies. However, generally speaking, the average person's knowledge of insurance is limited to what they understand from the general consumer market. Little did I know that Insurance involves far more than just home, pet and motor cover! In fact, the UK's general insurance sector accounts for only a quarter of the entire industry – there is extensive activity that people do not see going on in the background. Unless you're working in this particular field, it can be difficult to comprehend all the mechanisms and intricacies involved.
To grasp the magnitude of the effect InsurTechs have had on the insurance industry, you must take into account its immense size as well as its intricate structure with all its intricate and unseen moving parts. It is essential to remember too that insurance has a long history. It was officially established in 1849 but evidence of a “insurance contract” can be traced back as far as 1347, astonishingly making it one of the oldest industries still in existence today. Perhaps this makes it all the more impressive that many of these traditional methods have endured for hundreds of years; however, when we see how little has changed over time, it becomes plain to see why modernisation is so desperately needed. Old habits die hard though and often those entrenched in the insurance industry find themselves reluctant to move away from their familiar models and embrace technological innovations - a common issue which has been termed “spreadsheet addiction”.
As technology advances, industries face increasingly more pressure to integrate new methods into their businesses to keep up with the ever-changing environment around them. Hence why now more than ever Insurance Technology companies are leading the charge in the world of Insurance. There are of course different variations of Insurance Technology companies but when you look at lists of the top Insurtech companies, they tend to focus on ‘Direct Insurance’ or retail insurance, offering insurance packages directly to the customer at a much more competitive rate than your traditional insurers.
The insurtech industry has seen an influx of innovation and investment in recent years, with many companies making headlines by pushing forward the traditional status quo of the insurance industry. However, these high-profile entities often don't focus on providing effective back-office solutions for more established insurance firms which still largely dominate the market. This is where InsurTechs such as distriBind are having an outsized impact, driving change from behind the scenes.
By providing SaaS-based solutions that can be integrated into existing systems, these innovative tech companies are improving efficiency and accuracy while simultaneously streamlining data standardisation both internally and externally. This allows insurance businesses to more easily manage their day-to-day operations, optimise their customer experience, and better leverage existing data to make informed business decisions. By leveraging cutting edge technologies such as AI and automation, InsurTechs like distriBind are helping to revolutionise the way insurers operate - offering cost savings, increased convenience and improved transparency - all while creating a much more efficient and modernised industry landscape.
I grew up during a time of technological advancement and was able to observe the transition from the large, bulky Nokia brick phones to the more modern, beloved iPhones. That said, I had no idea that when I entered the industry, there would be such an affinity for the Nokia brick phone model. Everywhere I turn there is another article emphasising how important InsurTechs are for insurance companies in terms of their current operations and future sustainability; however, it appears that only a small percentage of the industry has really taken hold of these platforms. It's not that these InsurTechs don't exist; rather, they simply don't have their due share in terms of recognition or use amongst insurers. Understanding this concept has been enlightening as it reveals some truth about how difficult it is for revolutionary technologies to make an impact in a conservative sector like insurance.
Hopefully, this message will find its way to someone who needs distriBind or knows someone else who could benefit from them.