The advancement of technologies is playing a crucial role in transforming the lives of customers, especially of the Insurance companies. Due to emerging need to go Digital, Insurers’ are evolving, collaborating, and investing more with Insurtech firms to discover greater opportunities for efficient ecosystem. These new technologies - broadly categorized under the name InsureTech - are revolutionizing the way of doing business and causing a fundamental disruption in the Insurance ecosystem.
InsurTech is fundamentally a component of the overall FinTech wave which was embraced by Banking, Financial services, and Capital markets companies several years ago. There is a growing recognition across the financial services sector that, while banking and capital markets built up a considerable weight advantage by starting their FinTech journeys earlier, it is the insurance industry that will ultimately see the greatest benefit – and the highest levels of disruption – from this global upsurge of innovation.
With that, there are four broad areas that are setting new trends in the Insurance world:
1. Cyber Insurance
In cyber insurance, a suite of new products is beginning to emerge as insurers jostle to provide the best solution for a market that not too long ago did not even exist. This has opened up new revenue streams for insurers and, in several instances, whole new carriers have sprung up to try and fill the gap in the market as it grows. Cyber insurance coverage helps to meet evolving threats, and need for protection is in demand for following areas:
● Privacy Liability - A failure to maintain confidentiality of data
● Network Security Liability - The unauthorized use of your networks
● Media Liability - Your online media liability
● Cyber Extortion - Network or data extortion / blackmail
● Data Asset Loss - Data loss and restoration including decontamination and recovery
● Business Interruption - Due network security failure or attack
Cyber insurance has lack of historical data, reporting of cyber-attacks that are not consumer based, no geo boundaries, source is hard to find (need forensic analysis), assessing the financial impact direct/indirect. Determining liability sees goalposts constantly shifting as regulators redefine responsibilities and new types of risk emerge.
Insurers have biggest success on cyber insurance where risk mitigation and improving risk profiles of customers are being used.