4 December 2020
Technology has proved its worth in the face of Covid-19, enabling the insurance industry to transition to home working and digital placements swiftly and smoothly. This shift in working patterns has altered attitudes and eased previous reticence in the industry to adopt tech-led services, resulting in interest in insurtech rebounding.
2020 saw insurtech firms around the world raise a record $2.5bn worth of new capital, up 63% on the previous quarter[1], reflecting growing interest by insurance firms in automating and enhancing services via the use of smart tech and AI. 2020 will be seen as the year when the impact of Covid-19 accelerated the business models and solutions of more established insurtech players. 2021 is likely to see a more ambitious exploration of how the insurance industry can offer flexible coverage options and intuitive service delivery to reflect new working practices.
Against this backdrop, the way in which data is gathered, stored and used will be key.
Brexit and uncertainty over GDPR and the legalities of sharing data with other EU countries will complicate operating procedures next year, as will planned changes to other data privacy laws around the world. Increased reliance on outsourced and partner suppliers will require tight contracts and regular oversight of partner business practices and continuity procedures, in order to minimise the risk of supply chain contagion and reputational damage.
2021 is likely to be the year when insurtech comes of age, but the insurance industry must enter its tech-led future with its eyes open to the opportunities and the risks this new era creates.
View our Insurance 2021 Predictions here.
For further information, please contact:
Lee Bacon, Partner, Clyde & Co
lee.bacon@clydeco.com
