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InsureTechs: Pioneering New Practices in Insurance

Phil Reynolds Dec 27, 2017 11:24:13 AM


A Guide to Navigating the Evolving Insurance Landscape

InsureTechs are progressively disrupting the insurance industry to meet changing insured preferences. Carriers must adopt new strategies to remain key market players. 

As a whole, the economy is shifting towards concierge and convenience services. This can be seen in increasing preference for convenience companies like Amazon instead of Walmart and concierge services like Uber over taxis. Modern companies are successfully meeting consumer demands by integrating technology into their services to enhance ease of use and customer accessibility.

The trend of changing consumer preference is reflected in the insurance industry. Only 24% of millennials purchase homeowners insurance through local agents[1]. Similarly, consumer satisfaction is decreasing with traditional access channels as customers now expect highly automated processes that emphasize transparency. Celent research finds 37% of current policyholders prefer smart technology to human contact, which is expected to grow to 90% by 2022[2]. 

The evolution of customer preferences has created a demand for new products and services, yet many carriers are retaining traditional offerings, leaving customer needs unmet. InsureTechs—challengers disrupting the current insurance model through technology-powered strategies—are quickly emerging to fill the gaps. In order to contend with shifting consumer preferences and respond to InsureTech disruptions, Traditional insurers must modify their core, data, and digital solutions.


Insurance Landscape

Insurance carriers have generally focused on internal efficiency while leaving customer acquisition and consumer experience to third-party independent insurance agents. For decades, providers have invested in incremental automation through legacy IT systems which has driven expense ratios down but left infrastructure poorly adapted to modern consumer needs.

Today, financial markets are at record highs with incredible levels of wealth concentrated in the technology sector. Capital firms are looking for lucrative investment opportunities, and insurance stands out as an industry ripe for disruption. The rise of mobile devices and web-based consumer experiences has replaced the preference for personal interaction with a local agent among consumers age 45 and under. The commission collected by agents in the insurance process is a high-profile target for firms seeking new revenue opportunities. 

These factors have converged to drive billions of investment dollars into InsureTechs seeking to disrupt the traditional insurance process.


Types of InsureTech Disruptors

Growing at an exponential rate (attendance increased by 500% at InsureTech Connect from 2015 to 2017[3]), InsureTech companies are transforming the insurance landscape with three types of disruptors: Distribution Disruptors, Core System Transformers, and Supplemental Data and Device Users.


  1. Distribution Disruptors capitalize on the digital economy to deliver innovative ways of providing products and services to customers. Carriers are using technology to improve customer experience, employing tools and technologies that anticipate and meet consumer expectations.

    • Example: Jetty Inc. is a prime example of an InsureTech that has created technology-driven, user-centric distribution solutions to make insurance processes more convenient for renters. Jetty is a rapidly growing InsureTech with a direct-to-insured distribution model. Through their customer-focused website, renters and landlords can purchase insurance without ever talking to an agent. The process is simple, is beautifully designed, and conveniently provides users with an insurance policy in minutes.

  2. Core System Transformers strive towards comprehension, automation, scalability, and ease of use in their administration and insurance processes. Transformers employ the latest in technology (e.g., AI, machine learning, straight-through processing) to create the most efficient, easy-to-use processes for both employees and customers.

    • Example: Amazon Web Services (AWS) is a leading infrastructure provider, offering a workspace with hundreds of tools to build a product or software system with top-of-the-line automation and security. Technical carriers can build from scratch and effortlessly deploy their core systems through AWS. 

  3. Supplemental Data and Device Users implement modern data collection and processing tools into their insurance processes. From telematics to wearables and drones, these companies collect and process data in innovative ways to accurately predict policy risk and provide benefits to insureds.

    • Example: Many insuretechs are disrupting insurance by implementing supplemental data and devices into everyday insurance processes. Major insurers—State Farm, Allstate, and Progressive—reward policyholders for safe driving through data collected from telematics systems. The data provided allows for accurate, user-specific risk information for more precise risk calculation.


Disruptor Strategies

InsureTechs are pioneering practices in insurance by applying new technologies to traditional insurance processes. Below are examples of specific strategies InsureTechs are employing to meet and exceed customer expectations related to distribution, rating and underwriting, loss automation, and service.



Strategy Supports
User-Centric Web and Mobile Portals Direct Consumer Engagement
Data Pre-Fills Convenient Data Entry
Machine Learning Algorithms Auto-Suggested Products or Services
Point of Sale or Embedded Systems Accurate Customer Data (Buying Behavior)
Policies Packaged with Other Services (e.g., memberships with other companies) Prime Access to Traditional Prodcuts as a Value-Added Service


Rating and Underwriting

Strategy Supports
Straight-Through Processing Online and Customer-Driven Interaction
Aggregate Risk Profiling & AI Machine Learning Accurate, Efficient, and Precise Risk Estimates
Unique Risk Models Product Customization Based on Insured Needs
IoT Devices and Telematics Precise and Accurate Data for Underwriting


Loss Automation

Strategy Supports
Fraud Detection Algorithms Rapid Claim Processing
Automatic FNOL Responses Customer Satisfaction and Awareness
Smart Devices and Drones Quality of Data Collected During Property Evaluation and Claim Incident Verification


Customer Service

Strategy Supports
Self-Serivce, Chatbots, and Push Notification Convenient, 24/7 Concierge Service
Customer Profiles Created Via Analytics Targeted Prodcuts and Marketing
Digital Assistants (Alexa, Google Home, Siri) Product Accessibility


Engaging the InsureTech Revolution

Established insurance carriers have a unique opportunity to engage trends in InsureTech. The following three strategies augment traditional approaches:

  1. Compete Directly - Transform internal systems to compete directly for consumer business using modern technology.

  2. Underwrite the Insurance - Partner with InsureTechs to underwrite the products their technology platform is distributing.

  3. Invest as a Capital Partner - Utilize capital reserves to purchase equity in InsureTechs, benefitting from their success.

InsureTechs are a growing force for change in insurance and technology. Carriers are responding to insure-tech disruptions by competing with, underwriting for, or investing in insuretech-powered solutions. Take time this month to consider how your company can participate in the InsureTech revolution to deliver better products and services to customers.




[1] Narcisco, Eric (2016). 5 reasons millennials aren’t buying insurance from local agents. Retrieved from:

[2] Santana, Danni (2017) Insurers adopt AI to keep up with customer demands. Retrieved from:

[3] InsureTech LLC (2017). InsureTech Connect 2018 Brochure. Retrieved from:



Phillip Reynolds is the CEO and co-founder of Intuitive Web Solutions, creators of the BriteCore insurance processing system. He holds a certificate in "Leading Change in Complex Organizations" from the Massachusetts Institute of Technology and speaks frequently on organizational design and technological innovation for property casualty carriers. Mr. Reynolds received the "Governor's Missouri Entrepreneur of the Year" award from Governor Jay Nixon and led IWS to the #288 spot on the Inc. 500 list. He is a frequent presenter at State conventions and is currently serving on PAMIC's Information Technology Committee. Phil can be reached at