Don't miss out! Join us at
2024 featuring Fraud Fight Club on April 25th
arrow icon

Barriers and Drivers of InsurTech Adoption

Post by:
September 9, 2021
Post by:
No items found.
September 9, 2021
Barriers and Drivers of InsurTech Adoption

Even though lending and payments startups have been the hottest over the course of the FinTech revolution in terms of the number of companies that raised funds, we have been predicting that InsurTech is becoming a hot topic and sector for bright entrepreneurs to develop disruptive solutions. Investors also have been paying attention to the sector, as the insurance industry is the biggest in the US, with net premiums of $1.1 trillion in 2014. There is already a range of InsurTech companies paving their way to a trillion-dollar industry, and HealthTech is a vital sector to follow as it may completely change the way we look at health insurance soon.

However, even InsurTech can face certain obstacles on its way to democratize insurance. Along with obstacles, there are also factors to facilitate InsurTech adoption. Let’s look at the groups of those factors.

Factors to serve as adoption barriers

One of the inhibitors for adopting any technology replacing a human-like the AI Evia – could be a demand from the customers to interact face-to-face with another human. The desire for social interactions can’t be diminished even in the face of more efficient operations and a better offering.

Another problem could be related to the significantly increased data flow that could overload the systems and cause quality and privacy issues and cyberattacks, resulting in a rollback to decision-making based on intuition.

The environmental factor can never be dismissed as it is not dependent on any action of people and is not controlled by insurers. In case of an environmental disaster combined with the inability to predict the catastrophe based on data, chances are insurers will drop the unprofitable offerings.

Some believe that we live in a regionalized world where products are tailored to serve the population in a specific region. With InsurTech, the case may be that some regions and populations will be in advantageous positions and can use advanced and cheaper insurance services compared to other regions. It may deepen the exclusion and serve as a factor to drive inequality in the quality of life.

Last but not least is a regulatory burden factor. Governments have complex and cumbersome legislation related to insurance, which can serve as a barrier for innovators to make a difference. In addition, the high cost of compliance can negatively affect profitability and drive InsurTech companies which are potentially beneficial for the population out of business. Fortunately, RegTech can make a difference in this area.

Factors to drive adoption

One of the factors that could significantly facilitate adoption is social consolidation when self-formed and self-organized groups of the population directly interact with insurance companies to negotiate a better offering.

Sophisticated and automated data collection and analytics can improve decision-making and efficiency. It can also ensure tailored offerings, hence, improving the customer experience. Moreover, data scientists can significantly impact the productivity of those systems and create truly sophisticated protocols to brush through meaningful data and make the best decisions.

Insurance and risk analysis are closely related fields as an insurance choice is based on risk estimation. As InsurTech gains momentum, data-backed predictions on risk are becoming more relevant for efficient insurance estimation. There are important players in the field powering carriers, and more will emerge in the nearest future.

Advanced data-focused, early-warning technologies and new risk transfer/sharing mechanisms can reduce the losses from environmental hazards and other catastrophic events. Contrary to the complex regulatory burden on emerging players, governments that improve the legislation to ease the way of innovative solutions into the market will have a positive outcome for the population and overall industry.

To learn about Prove’s identity solutions and how to accelerate revenue while mitigating fraud, schedule a demo today.

Create secure frictionless customer experiences using modern identity solutions

Join over 1,000 businesses that rely on Prove across multiple industries, including banking, FinTech, healthcare, insurance, and e-commerce. Contact us today.

Prove: the world’s most accurate identity verification and authentication platform

Trusted by 1,000+ leading companies to reduce fraud and improve consumer experiences. Contact us today to learn how you can frictionlessly secure your digital consumer journey — from onboarding to ongoing transactions.

Keep Reading...Read our latest white-paper on this subject!

Tap the button below to read our latest white-paper on the subject as industry leaders.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-Fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

Create frictionless customer experiences

Get in touch to find out how we can help you identify your customers at every stage of their journey and offer them seamless and secure experiences.

Schedule a demo

Let our expert team guide you through our identity verification and authentication solutions. Select a date and time that works for you.

Schedule a demo

Find out how we can help you deliver seamless and secure customer experiences that comply with PSD2/SCA. Select a date and time that works for you.

Interested in more information about Prove Pre-Fill?

Download the Report

Download Aite-Novarica Group’s full report about Prove Pre-Fill, including a product overview, customer results, and how the product works.

Interested in more information about MFA?

Download the guide now to learn how you can improve security, cut down on fraud, and create the best possible customer experience.