Page 39 - Insurance Times August 2019

2. The distribution segment does not have any mismatch Insurtech Tools
between the potential and level of activity in the The insurance industry is about to go a long way with an
startups. However, the potential explored has been amplification in the operational efficiencies guided by
quite limited because of a crunch in resources available
technology and other trends. Some of the recent trends that
or very little opportunity for differentiation. A snapshot
have been seen in the insurance industry are:
of the strategic assessment of this segment is shown 1. Smart contracts: A smart contract is a computer protocol
below:
intended to digitally
facilitate, verify, or
enforce the negotiation
or performance of a
contract. A smart
contract works on
Blockchain technology for
transparent and flexible
claims management. The
amplitude of the
insurance premiums to
be paid by the customers
would be determined by
a mathematical algorithm
according to a risk based
model. Likewise, the
insurer can select the
insurance policy which is
feasible to him/her.
Smart contracts allow the
performance of credible transactions without the
3. The Insurtechs have done fairly well in the operations
involvement of third parties.
segment. The next phase in these segments would be
to step up and make the processes more efficient and 2. Telematics: Telematics is the branch of information
consistent such that they would help companies in the technology which deals with the long-distance
insurance sector produce long term sustainable profits. transmission of computerized information. Telematics
A brief overview of the strategic assessment of this is commonly used by insurers to study the driving
segment is shown below: patterns of the customers. On the basis of the study
patterns, the insurers give
a rating that eventually
determines the customer's
premium. A telematics
device can be plugged to
the car or even an app can
help to transmit the data.
The telematics device can
also reach out for help in
case of an emergency or
can automate toll
payments too.
3. Wearables: Wearables
are smart electronic
devices that can be
incorporated into clothing

The Insurance Times, August 2019 39