October 25, 2019 by Greg Meckbach
Insurtechs like one Canadian startup in particular are letting brokers provide better service, but the sector as a whole contains some money pits for investors, Willis Towers Watson suggested in a report released Wednesday.
“Unquestionably a good number of InsurTechs are genuinely adding value,” Willis Towers Watson said in its quarterly insurtech briefing.
But nearly US$17 billion has been invested into insurtech in the past seven years – US$1.5 billion in the third quarter of 2019 alone, reports Willis Towers Watson.
“There is a very large sinkhole somewhere,” said Willis Towers Watson. “Who can honestly say that we have seen at least US$16.8 billion worth of value created?”
But one example of an insurtech that does create value is Kitchener, Ont.-based ProNavigator – one of three insurtechs highlighted in the report.
Joseph D’Souza founded ProNavigator in 2016 after he was placed on hold by his insurance provider for more than 90 minutes after calling with what he thought was a simple question.
ProNavigator uses artificial intelligence to do natural language processing. It is touted as a way for users get answers – both through chat and by phone – without using industry jargon, on underwriting, product or billing.
“Since launching in 2016, the AI platform has helped over 90 brokers and carriers implement a streamlined customer value chain,” Willis Towers Watson said of ProNavigator.
The third quarter of 2019 was the fifth quarter in a row in which Willis Towers Watson has observed more than US$1.2 billion being invested in insurtechs worldwide. A total of 83 deals, in both life and health and property and casualty, had about US$1.7 billion invested into insurtechs, Willis Towers Watson said of the latest quarter. That is up 6% over the second quarter of this year.
Companies keep data on policies and claims but some have a “culture of poor data integration” and information that is difficult to extract, observes Willis Towers Watson.
“We are at the dawn of something truly incredible, however; affordable technology is allowing every iota of data relating to policies sold to be stored, augmented and able to provide the basis for what a (re)insurer can do to provide best in class customer engagement, improvements to products sold, fine-tuning of price, portfolio risk management and appropriate reserving ratios — to name but a few direct benefits.”