The InsurTech industry thrived during what was still a very difficult year for many. However, companies have had to adapt to changing market conditions. FinTech Global takes a look back on some of the key trends of 2021, and what this might mean for the year to come.
Following the traumatic year that was 2020, this year represented somewhat of a light at the end of the tunnel. Many businesses had their hopes pinned to 2021 as the supposed recovery year, but the reality proved less straightforward.
A result of evolving consumer expectations was a drive to digitalise and adopt more technologies. Peter Reynolds, head of insurance, international at Earnix, said, “The best way to address these rapid sector-wide changes is to find the best technology solution that is compatible with enterprise-wide systems and implement solutions with fully personalised and dynamic rating and pricing capabilities. Doing so empowers insurers to increase customer satisfaction and retention and meet their business objectives.”
Reynolds proposed that usage-based insurance (UBI) provides a desirable and effective solution to understanding a consumer’s needs better.
Although it has been around since the 1990s, Reynolds said the pandemic acted as a catalyst for the increased adoption of UBI. In the context of auto insurance, for example, as consumers spent more time at home and less time driving, they demanded auto insurance coverage to reflect the changes in their driving habits. “Now, insurers recognise they must meet consumers where they are today and accurately predict future changes in their behaviour that are reflective of a dynamic market,” he added.
In July, Earnix acquired AI telematics provider Driveway Software’s assets to scale up its UBI and Behavior-Based Insurance (BBI) solutions. The offering was designed to enable auto insurers to manage the entire lifecycle for personalised telematics-based UBI/BBI through a mobile-centric engagement. Earnix’s UBI/BBI offering now boasts a full set of embedded capabilities necessary for carriers to anticipate and proactively address the needs of the changing market – data accuracy, driving risk models, driver engagement – resulting in more accurate pricing and more personalised offers.