The insurtech industry has always needed to be agile. As the risks the insurance industry protects against have evolved, insurtech has more than met the challenge, supporting businesses and individuals. According to a research “Risk landscape evolution drivers may be classified broadly into five macro trends – disruptive environmental patterns, technological advancements, evolving social and demographic trends, new medical and health concerns, and the changing business environment. As a result of these trends, high-impact new risks are emerging that may significantly affect policyholders while pressuring insurers and prompting industry action.”
One growing area of concern is climate change and the increasing frequency of extreme weather events. According to a U.S. research, between 2016 and 2018, there was an average of 15 extreme weather events in the US when compared to just five between 1980 and 2015. With this level of event acceleration, the entire insurance industry must react with new approaches that take into consideration how climate change could impact their clients. The social, political and monetary risks continue to place stress on personal and national economies. The risk landscape is diversifying with climate change, becoming the hub around which many insurtech companies are orbiting. What is clear for the entire industry is that it must change and evolve to meet these new risks and threats.
Insurers can see how the world is rapidly changing. Technology may present new risks as connected devices, thanks to IoT (Internet of Things), expand the potential threat landscape for data. New risks could emerge as autonomous vehicles, nanotechnology and AI (Artificial Intelligence) continue to develop as ever-faster speeds.
Youngran Kim, Regional CIO, Allianz Asia Pacific said: “Insurance models are rapidly changing in response to the emerging risks. Insurers need to transform themselves and proactively manage the emerging risk scenario, rather than just adapt to it.”
The advantage insurtech has, is its ability to react and develop new services and products that meet the rapidly changing needs of their customers. Insurtech can be proactive and create new strategies that enable the industry to meet customer needs and, protect the sustainability of their businesses.
Insurtech must adjustment to meet the risk landscape that is shifting before them. A deep understanding of the risk parameters and a focus upon the risk horizon will ensure products are available to meet every customer need.