Insurtech has become a major part of the insurance market, with record-breaking amounts spent on technology-based innovations that can revolutionise the sector. It’s an area ripe for investment – with more than $1bn (£760m) spent every month on investment into insurtech startups in 2021. Joining industry experts to share insurtech innovation trends for 2022, Udi Ziv discusses the resurgence of usage-based/parametric insurance and how insurers can more accurately estimate risk against individual consumers and personalize offers.
When introduced in the ’90s, usage-based or parametric insurance often relied on hardware, with customers expected to install it, use it to track their behaviour and then return the device via mail. There was limited value. However, things have changed and the ability for insurtech to harness those changes has been key to the resurgence of parametric insurance. Almost everyone has a smartphone that is capable of tracking where they are, how fast they’re travelling, and where they visit on a given day. While there are obvious implications for car and vehicle insurance, the reality is that the picture painted of our lives and habits by seeing where we go on a day-to-day basis is a boon for insurers in all areas.