31 Aug The Rise of Insurtechs and Their Impact on the Travel Insurance Industry
Unfortunately, insurance doesn’t have a lot of good press. People generally live with insurance products without actually wanting them, buying them only because they have to. So insurance is viewed as a burden by the consumer and is only used when there is an accident or mishap, which further aggravates and distorts the perception of insurance. That’s why we’re happy when we hear about insurtech, the combination of the worlds of insurance and technology, as it’s bringing some much needed fresh air to the sector. Insurtech has some great advantages as it’s enabling a new generation of providers to build platforms and solutions that focus on the customer like never before, by creating more personalised services, coupled with simplified interactions and transactions.
Some figures on the insurtech sector
Carlos Trevijano – partner responsible for the fintech strategy of KPMG Spain – shared with the rest of the participants of the congress some illuminating data from the last global study published by his firm. The “Pulse Fintech” report spoke of the strength of the insurtech sector, which already has 247 active operations worldwide, with a total market value in excess of 2.1 billion US dollars. This data suggests that the insurtech sector is now in a privileged positions within the wider fintech world, as more investment has been directed here than any other fintech sector in 2017.
Trevijano had this to say about the recent growth of insurtechs “The participation of insurtech has grown a lot during the last year at the global level, due to the maturation of startups that have developed niches or specific branches and the development of others that have taken advantage of advances in the possibilities of automation and personalisation of the product offering. New technological developments, such as telematic advances, have also been very relevant”. In keeping with this tone, Asunción Carrasco – COO of Coverontrip Travel Insurance – added that insurance providers have to form closer and friendlier relationships with their customers compared to now, as there is still a barrier or a distance in place “especially with the millennial generation,”. This opinion was support by Juan Antonio Martínez, Corporate Business Manager at AXA who advised that to prevent people from only remembering travel insurance when they have a problem or when a disaster occurs, you have to try to develop other ways of complementing your service, so you can have other moments with the customer.
An invitation to experimentation
This was the tone of the event, which also included authorities such as Francisco Álvarez – co-founder and Chief Dreaming Officer of Sharenjoy, who said that the intermediation process between the customer and the insurer could not be replaced, but that insurtech will fundamentally change it, offering added value or additional services such as chatbots, personalised mutualisation’s or a better implementation of the contracting and use of the product. “Insurtech will allow a freshness and agility that the sector needs,” said Asunción Carrasco, who, in turn, encouraged other companies in the sector to experiment and to face trial and error with new technology.
It is clear that with these statements the sector looks towards the coming disruption that the insurtechs will bring with hope and expectation. Some, such as José Luis Ruiz – director of the Santalucía Corporate Development unit – understood the emergence of this as something challenging and invigorating, and praised the “will” and predisposition of the sector to transform itself and to take advantage of all the opportunities that this will herald.
Sherpnya, a case study
Asunción Carrasco, commenting again on how Coverontrip markets to its target audience with the concept of ‘a different type of travel insurance’, stated: “Our target market are millennials, and our approach is completely different”. Social networks are a good tool to help make a product such as travel insurance more attractive to young people who travel. “The process of acquisition and the customer journey of millennials are totally different, and is something that requires a medium-term approach.”
A good example of the application of insurtech is found in the case study of Sherpnya’s app for travellers, Travel Be. The primary function of this app is not to sell travel insurance, it’s instead to create an environment of familiarity and friendship with users; an environment that promotes an emotional bond between the customer and the company. The idea behind this app is that the users can share their travel knowledge and therefore enrich one another’s trips.
This and other examples give us a perspective of how insurers and insurtechs reach out to transform the sector. “Between the insurers and the insurtechs, the customer can be placed at the centre and the two actors can think about how to improve their experience. This is the point of union that, undoubtedly, will continue to exist “, concluded Juan Antonio Martínez.