Insurance is an industry ripe for technological disruption, with new innovative approaches offering streamlined, manageable policies.
The advance of fintech is swift and far-reaching and now fintech startup, Revolut, is set to provide medical and dental insurance via its app for travel, driving forward the emerging insurtech market.
Using the Revolut app to subscribe to the service, a daily charge of £1 is then required to initiate coverage. This amount varies depending on which type of cover you require.
Leveraging geolocation technology, this insurtech offering from Revolut is capable of activating and deactivating your insurance coverage based on where you are. This feature eliminates the need to remember to secure insurance coverage prior to travel.
While Revolut is providing this capability, Thomas Cook Money is handling the travel insurance behind the service, perhaps reassuring some that a familiar name is in the engine room of the project.
Insurtech is growing quickly as it arrives via SaaS platforms, wearable trackers, in-car monitoring systems and customer-facing apps. IoT and AI are among the cutting edge technologies that are also set to revolutionise the industry.
“This is yet another example of how transformative technologies, such as the Internet of Things and connectivity, are shaking up the insurance industry. In such a competitive market, it is personalised services that will set companies apart and first-timers who seize the opportunity and make a fast move, such as Revolut, have an opportunity to lead the market,” said Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland.
“The new pay-per-day travel insurance plan based on the mobile phone’s geolocational services is a clear example of how insurance companies can offer hyper-personalised services through digital channels and use the available data to launch new products. What Revolut has done is introduce an entirely new approach to insurance, making targeted and personalised services the core of their offering.”
In 2017 Insurtech reached new heights in terms of investment, raking in a colossal £218 million in investments in just the first half of last year alone. In comparison, the same period in 2016 saw investments of just £7.3 million, representing the explosive growth of the emerging market.
A key area of disruption in insurance is underwriting, this may be unsurprising to many as technologies like IoT can build a never before achieved level of clarity in terms of data. For example, a device could be embedded into a vehicle to produce a highly accurate policy, tailored to the individual.
Usage-based insurance is another key area that insurtech can promote, and Revolut has made a prime example of this with its latest offering. Usage-based insurance is coverage that will only be in place when it is needed, further streamlining policies and services.
“It will be very interesting to see the progress of such a service. Whilst many individuals are happy to provide data in exchange for targeted services – given that the information is secure and not used for other purposes – many are still nervous of a Big Brother type approach and might ask whether this data will be restricted to location information only,” Fujitsu’s Boulton said.
“However, there are clear advantages here for both the consumer and the insurer. For instance, the ease of use and expediency will potentially provide a route to market and significant uptake, while also offering greater information on the purchaser and the opportunity to reduce fraud and mitigate claim payments.”