Although the word "InsurTech" dates back to at least 2010, its use and influence have grown in recent years. InsurTech - a portmanteau of insurance technology – is about how technology is transforming the insurance sector at its most fundamental level. InsurTech in Malaysia and the rest of the world has gained relevance over time as an integral component to the future of insurance. Like Fintech, it is a wide term that encompasses both insurance processes and products. It's also often used in the insurance business to describe disruptive start-ups and products. InsurTech's ascent has coincided with the advancement of Artificial Intelligence (AI) technology and the enhanced data-crunching capability now available to businesses.
The investment share of the InsurTech market fell dramatically in 2020, although analysts believe this is a one-time pandemic-related blip. Investment, as determined by the number of agreements completed, has consistently increased over the last decade, peaking in 2018 with 466 deals completed worldwide. As a result of the epidemic, several insurers have accelerated their digital transformation initiatives and are looking for InsurTech opportunities that can help them speed up virtual interactions in sales and claims while also lowering costs.
Data has traditionally been used by insurance companies to perform the core responsibilities of underwriting risk and assessing claims. According to Abbott, new technologies have boosted the volume and quality of data available, allowing insurers to uncover new efficiencies and develop new solutions. The initial concentration was on web-based and mobile-friendly content. It was always about making the experience more user-friendly. In recent years, we've seen technology like Artificial Intelligence (AI) and data analytics used to develop more efficient and cost-effective alternatives.
With that being said, there are few differences between InsurTech and conventional insurance that may lead to a disruption of the insurance industry, bringing more innovative and customer-friendly services to market.