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From: NetworkNewsWire (Rep: 0)Date: 03/31/2020 17:30
Forum: Penny Stocks - Msg #4575 - List ISGI msgs Thread #674138829 (Rec: 0)
Technology Transforms the Insurance Market

NetworkNewsWire Editorial Coverage: The successful rise of fintech has inspired a similar wave of technological innovation in the insurance sector, as more companies are looking for ways to serve their customers.

InsuraGuest Technologies Inc. (TSX.V: ISGI) (ISGI Profile) is one of the companies in this arena, providing software that eases the provision of insurance for specialist sectors. W.R. Berkley Corporation (NYSE: WRB) is adapting through the reorganization of its business, combining divisions and creating new ones as insurance necessitates change. Berkshire Hathaway Inc. (NYSE: BRK.A), like many other insurers, relies on data and analytics to constantly improve its understanding of the market and of insurance customers’ needs. Fairfax Financial Holdings Ltd. (OTC: FRFHF) is invested in a range of insurance companies around the world, providing the financial support for insurtech innovations. And AON plc (NYSE: AON) is experimenting with disruptive technology, such as blockchain in its insurance products, and has gained industry recognition for its work on cyber insurance.

Insurance technology (insurtech) is on the rise, providing innovative, integrated systems.
The technology has attracted $16.5 billion of investment over a decade; the rate of investment is increasing.
To make the most of this, companies need to adapt approaches to insurance and the way that they work with providers.


The Rise of Insurtech

Recent years have seen fintech — financial technology — become one of the biggest buzzwords in investment. Technology is revolutionizing the way that money works, from huge successes such as contactless payments to intriguing experiments like cryptocurrency. This has made finance easier to manage for consumers and businesses, and provided countless opportunities for investors along the way.

That heightened pace of change has taken hold in the insurance market. In one survey, 74% of insurance companies said that they saw fintech innovations as a challenge for their industry, while 43% were putting it at the heart of their corporate strategies. Insurtech — insurance technology — is the new game in town, applying the lessons learned from fintech and the potential of modern technology to create innovation and opportunity within the insurance sector.

Where Technology and Insurance Meet

Insurtech is currently being driven not by the big providers but by the innovations of start-ups. Companies such as InsuraGuest Technologies Inc. (TSX.V: ISGI) are targeting particular niches with their insurance systems, using this approach as an opportunity to innovate and capture a specific market before expanding their offerings to a wider audience. The different insurance needs of different markets allow insurtech companies to provide added value by tailoring to specific needs of clients while building systems that can be adapted elsewhere.

The example of InsuraGuest shows how this can work. InsuraGuest is an insurtech company that has initiated its distribution by catering to hospitality sector before it expands its product offerings into revenue streams. ISGI combines insurance provision with software as a service (SaaS) to provide hotels and vacation rentals easy access to the insurance coverages they need to protect their properties, both covering gaps in existing insurance packages and making it easier to arrange and deliver new insurance products.

Hospitality sectors are already a relatively tech-savvy. In Europe, 59% of property managers use a specialist property management system (PMS) and 67% use a channel manager. But typically insurance hasn’t been integrated into these systems, meaning that it has to be managed separately. InsuraGuest recognized an opportunity and solved this issue by integrating its insurance with 71 different PMSs around the world, giving them software access to potentially deliver their insurance coverages to millions of rooms, thus the ability to obtain insurance melds seamlessly with other parts of the process.

InsuraGuest integrates with the property-management system to distribute insurance coverages that add a layer of protection for the property on a primary basis, should a guest experience an accident or theft while staying at an InsuraGuest member property. Technology takes away much of the burden of arranging insurance, and because the technology is provided in a SaaS format, member properties are able to buy into all the support systems they need, rather than just buying a standalone product and then being left to make it work.

This sort of innovation is drawing serious money into insurtech. Over the past decade, approximately $16.5 billion has been invested in the sector, and the pace of investment is only accelerating. The first half of 2019 alone saw $2.2 billion raised. This increase isn’t just driven by a desire for change from the inside; there’s also outside pressure. Ratings companies are looking at how insurers use technology, and their assessments could seriously impact the future of these companies.

One of the reasons why smaller, newer companies are so important to this trend is their combination of skills and flexibility. Like many other start-ups, InsuraGuest has created its own insurtech software platform, one that can be adapted to deliver specialized insurance coverage for a range of industries. By growing the skills and technology in-house, ISGI is able to shift the design of the platform to meet a wide variety of customers’ needs.

Innovating Alongside Partners

Though technology allows radically new ways of working, many insurance companies aren’t using it to its full capacity. An estimated 90% of the resources insurance companies are putting into technology are currently going into maintaining existing approaches instead of exploring real innovation. Insurers are trying to do old things better rather than doing new, better things.

Companies such as InsuraGuest offer the opposite approach. By integrating insurance and SaaS in a single flexible package, the company is providing a new process, one that removes the friction for the final customers of the insurance product. This could be a critical step in selling better insurance.

Part of the more traditional thinking that may be holding insurance companies back is that they’re treating insurtech providers as vendors rather than partners. This approach can lead to outdated standards and processes being applied to both contracting and onboarding, despite the fact that this technology is meant to push companies forward. Doing so counteracts the disruption that is a critical benefit of insurtech. The real successes will likely come from companies that can overcome this habit and effectively partner with the insurtech innovators.

Sometimes these insurtech companies themselves are built around a more modern, partnership-based model. ISGI appears to have ventured out into new territory. InsuraGuest’s platform is set up to deliver insurance packages directly to partners on a business-to-business basis. The company has also created a fully automatized agency/broker software program, allowing agents and brokers the ability to sign up instantly online. This speeds up the process of distributing ISGI’s platform and products, as these agents and brokers then become channels to take InsuraGuest’s insurance out to their own customers.

Insurtech provides numerous opportunities for companies to improve their insurance offerings. From better-tailored insurance packages to seamlessly integrating insurance, software and other systems, ISGI may provide a chance to make real change in the insurance industry. By using technology to change the way that insurance is delivered, companies such as InsuraGuest are pulling the industry into the future.

Transforming the Insurance Industry

As the insurance industry faces the challenge of the modern world and seizes the opportunities that insurtech offers, many companies are looking for ways to improve how they work in the sector.

For some, this means organizational change to reflect shifting markets, products and processes. W.R. Berkley Corporation (NYSE: WRB), a large American insurance holding company, has accomplished this through a long-term strategy of decentralized operations, providing the company with the flexibility to respond to ongoing change. Recent shifts in the company’s structure include the combination of its two healthcare-related units into one, creating a single source for the wide range of insurance products that the healthcare market needs. Another of its recently formed divisions, Berkley Prime Transportation, will be focusing on the use of technology and analytics to provide high-quality, responsive services to the commercial transport sector.

Holding company Berkshire Hathaway Inc. (NYSE: BRK.A) includes insurance among its wide range of interests, through Berkshire Hathaway Specialty Insurance and Berkshire Hathaway Travel Protection. Between them, these companies provide insurance covering a wide range of sectors, including travel, professional liability, and homeowners insurance. The company places an emphasis on the importance of data in understanding insurance needs, and it’s this type of careful analytic work that allows insurers to provide suitable products at the right rate for their customers.

A specialist insurance investment company, Fairfax Financial Holdings Ltd (OTC: FRFHF) is engaged in property and casualty insurance through a range of subsidiaries. These insurance and reinsurance companies work on a decentralized basis, each with its own management team providing a focused underwriting strategy suited to its market, giving the company valuable flexibility. Late last year, Fairfax announced a substantial investment from OMERS, the pension plan for Ontario’s municipal employees, in Fairfax’s UK run-off group, RiverStone UK.

A global professional services firm, AON plc (NYSE: AON) provides insurance along with data services and retirement support. Aon has been using the latest technology to develop new insurance products, including blockchain-based agricultural insurance policies for smallholder farmers in Sri Lanka. This use of innovative technology to serve a specific community shows the value of combining innovation and flexibility to reach an underserved niche. In 2019 the company won awards from Business Insurance magazine for its cyber-risk solutions.

While much is happening in the world of insurance, and big companies are expanding their insurtech offerings, real innovation still looks to depend on the flexibility of start-ups and small firms.

For more information on InsuraGuest Technologies, visit InsuraGuest Technologies Inc. (TSX.V: ISGI)

Please see full disclaimers on the NetworkNewsWire website applicable to all content provided by NNW, wherever published or re-published: http://NNW.fm/Disclaimer

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