The relatively young but quite vibrant history of InsurTech proves that the industry has a lot of potential in causing significant transformation in the insurance business. Since 2013, insurance technology has been actively taking off and creating its own niche in the market. The use of disruptive technologies like big data, Internet of Things (IoT), mobile technology, AI, social network and blockchain are gaining momentum – and InsurTech firms are looking for a scope to capitalize it.
In fact, investors around the world poured $2.6 billion into InsurTech in 2015. There are already over 1,300 startups from across the world focusing on the insurance industry – one of the most massive and complex ecosystems with large and powerful corporate players already taking steps towards riding the wave of disruption.
The problem with the current commercial insurance business model
Without a doubt, there are substantial inefficiencies in the current business models in the insurance industry and no improvement can be reached without changes in the basic model of how this business is done. But while some would suggest leaning on disruptive solutions, others are looking for ways to improve the existing models for the benefit of everyone involved.
So, what exactly is the problem with the existing processes?
Image source: RiskMatch
The estimates suggest that the current commercial insurance business model requires two weeks to three months to get things done – a ridiculously long time, given that anyone can get a quote from digital insurance platforms in probably less than 10 minutes.
The current model involves manual back-and-forth between involved parties in order to reach a satisfying solution agreement, making the process cumbersome, lengthy and costly for everyone.
The problems faced by insurance brokers and carriers in the current model
Any positive implications of disruptive solutions come at a cost and insurance brokers, along with institutional players, appear to be the ones to pay it. InsurTech startups bringing solutions through convenient and efficient mobile applications have disintermediated the whole process of getting an insurance and left out a class of employees depending on traditional models built for decades by large insurance companies.
Brokers ended up being at a disadvantageous position due to reasons other than competition as well: paper-based data management, complicated workflow with scattered and sometimes unreliable data, inadequate analytical tools and resource constraints overall have been of a disservice to the whole group of the population involved in insurance brokerage business.
Given that a limited layer of brokers can afford to invest in so many new technologies and that modern tech-powered insurance products are often Web- or app-based, brokers may consider startups to be removing the necessity for brokers at all.
Moreover, even insurance business owners feel threatened by tech-powered competitors. The most recent estimations highlight that 90% of insurers fear they will lose business to a startup as annual investments in InsurTech startups has increased fivefold over the past three years. In addition, the results of the study published in June suggest that the pressure on margins (73%) and loss of market share (69%) are highlighted by insurance executives as the top threats technology companies pose to the industry.
Not only are external factors undermining the position of corporate insurers, there are internal processes that require attention as well. Uninformed clients, distributed network of brokers, unconnected account owners, traditional paper-based models – everything leads to internal inefficiency with high distribution costs and high declination rates.
How insurance brokers and carriers can regain leading position in a disrupted market
Unfortunately, when benefits promise a return that neglect downsides (like with InsurTech), the cost is often lost in the excitement of expenses reduction and higher business efficiency. Nevertheless, there are innovative companies leveraging advanced technology to support brokers, underwriters and carriers with high returns for every party.
One of the most notable players on the broker’s and carriers side of the field is RiskMatch, the fastest-growing insurance platform that delivers Web-based solutions for insurance intermediaries and underwriting partners throughout the US.
The company’s patented platform provides an array of portfolio management and placement solutions, analytics, internal and external benchmarking capabilities, and information management services designed to enhance performance, reduce costs, facilitate growth and improve client service.
RiskMatch addresses the challenges and the need for transformation of the current model facing new and highly competitive entrants that employ new models, allows taking advantage of advanced analytical tools enabling higher speed, efficiency and returns.
What does the RiskMatch solution allow brokers and carriers to do?
What are the benefits of using RiskMatch for insurance brokers and carriers?
The benefits of the solution for brokers:
- Benchmark client coverages and programs; enhance client deliverables and carrier relationships.
- Identify new business and growth opportunities across the portfolio.
- Access reliable data, insights and analytical tools customized to individual roles and responsibilities within the company.
- Obtain continuously enhanced intelligence on carrier appetite, client information, and colleague expertise.
- Acquire structured risk data, provide quotes online and send and electronic policy.
In addition, brokers gain higher portfolio visibility; they can enhance new sales and increase retention. Within one platform, brokers can send submissions, receive quotes and automate renewal tasks. RiskMatch allows them to effectively manage client, carrier and wholesale relationships.
The benefits of the solution for carriers:
- Identify and target business in their underwriting appetite.
- Expand your product reach within national, regional, and local brokers.
- Access to analytics on competition, metrics on relationships, and research for new products.
- Introduce their product to account owners and producers by a trusted source.
- Receive submission data in preferred formats (electronic/paper) and prioritize submissions for underwriting appetite.
RiskMatch was awarded a patent for facilitating connections and enhancing the collaboration between brokers and insurance companies.
The scale of RiskMatch
Since the launch in 2012, the company was able to significantly amplify its data sources to go from managing $700 million in premiums in 2014 to having 5 carriers and 150 brokers with 15B+ in P&C premiums and 1B in benefits premiums on the platform in 2016.
RiskMatch processes over 65M records from various brokers and provides price and product discovery and transparency for commercial insurance. A seamless experience to acquire clients, place policies and renew policies for brokers.
Among the most recent clients acquired by RiskMatch are Heffernan Insurance Brokers (one of the largest independent insurance brokerage firms in the US), Simpson & McCrady (a regional insurance agency serving affluent and high-net-worth individuals and their families and middle market businesses), Ascension Insurance (a national insurance agency ranked within the top 45 largest agencies by revenue), Cobbs Allen (a national insurance and risk management firm) and much more.
A world-class team of designers, developers, data scientists, business development leaders and client engagement managers comprises the foundation of the company with founders of RiskMatch having 17+ to 30+ years of experience in the insurance industry.