The conditions of the global pandemic accelerated the transformation of industries when it came to digitization, and the insurance industry was no exception. Ecommerce experienced a colossal boom, as more and more people took to their devices to shop instead of venturing out, and the chain of industry sectors in the retail space had to scramble to keep up.

Emerging technologies have been creating change in virtually every industry for some time now. While COVID-19 accelerated the speed of that evolution, the change in consumer behaviors and expectations isn’t going anywhere. There is still a sense of urgency for financial services to shift towards complete digitization to keep up.

Consequently, there are several ways in which Fintech is transforming the insurance industry, as it creates systematic changes to antiquated business operations and revolutionizes the space entirely. 

1. Appealing to younger consumers

The younger the customer is when they take out their first policy, the more opportunities for longer-term business and profit. Younger demographics, such as Millennials and Gen X consumers, are more attracted to companies that provide them with on-the-go mobile transaction options. Providing these convenient, low-impact InsurTech options not only draws in the attention of younger customers but can gain their loyalty, too.

That said, younger consumers are less likely to remain loyal to one financial company over another, as technological advancements make it so easy to compare and switch insurance companies. This is why insurance companies must keep up with the emergence of more sophisticated Insurtech optimizations to retain clients who will otherwise switch to another company to fulfill their changing needs.

2. Meeting customer tech expectations

High-tech, low-impact, zero-contact, minimal steps – these are just some of how the focus of customer expectations has evolved, both in recent times in general and since the onset of the pandemic. 

Instead of considering the emergence of Fintech and Insurtech startups as a threat to their survival, long-standing insurance companies offering life, auto, and SR22 insurance must roll with the times and view these changes as an inspiration for their evolution.

Global retail giants like Amazon, Google, Apple, and most leading banking institutions, have set an entirely new precedent when it comes to the quality and convenience of the digitized, mobile experiences consumers have come to expect. 

In this way, Fintech has made it impossible for the insurance sector to ignore, and survival and growth in the industry depend heavily on optimizing their Insurtech services.

3. Optimizing the customers’ experience

In keeping with the need to meet new customer expectations, embracing Fintech into the insurance industry operations will not only achieve this. Still, it will enhance the customer experience like never before.

InsurTech startups do have the advantage of going straight to market as a fully digitized operation. That said, many long-established, traditional insurance companies still hold many loyal customers that they can retain so long as they Fintech advancements quickly.

Fintech optimizes operations and enhances the customer experience in a wide variety of ways. Chatbot technology is constantly advancing in its capacity to handle real-time inquiries round the clock. Other Artificial Intelligence (AI) solutions allow for many streamlined customer experiences and enable companies to make more personalized product suggestions.

Fintech is ultimately working towards end-to-end automation processes for users and more accurately fulfilling consumer needs. Slice, for example, is an InsurTech company that enables renters to insure for set rental periods only. 

The app Lemonade enables consumers to lodge home insurance claims and even have them approved and paid out in a fraction of the time it used to get through to a claim handler on the telephone.

Staying relevant

The success of many technological advances that InsurTech startups largely relies upon how well their offerings fit with the current needs and realities of the market. Both now and into the future. 

Many InsurTech ventures are emerging with highly niched product ranges. Those that narrowly target small businesses, ridesharing, or particular aspects of home or renting needs, for instance, may find it increasingly challenging to stay relevant.

Final thoughts

The technological revolution of the insurance industry is inevitable, and Fintechs focusing on revolutionizing the sector at large are now firmly entrenched in the insurance landscape.

InsurTech niche ventures may need to ensure that they still stay somewhat relevant to mass market needs to stay in business. Long-standing companies need to transform the operational digitization of their businesses quickly to stay in the game.

COVID-19 may be finally under some modicum of control, but the colossal shift in customer expectations regarding digitization and mobile solutions is here to stay.