Insurtech - A New Branch of Fintech
The Fintech evolution is bringing more innovation to the Financial Services of the world day by day. As new technology advances, companies in the Financial sector must gain digital ground to stay relevant and excel in their services - Fintech is now branching out into new subsets - Regtech (Regulatory Technology) is offering an increased focus on data analytics and bringing greater value to the responsibilities of compliance monitoring and reporting by using innovative cloud computing and Big Data technology to provide more effective methods of operating.
Now, Fintech is presenting the rise of Insurtech (Insurance Technology), promising to revolutionise the insurance sector the same way that Fintech revolutionised banking. With the insurance sector moving towards this digital shift, technology promises to facilitate the creation, distribution and administration of insurance firms through the use of the latest AI and IoT technology. Below, we take a look at the technologies which are shaping Insurtech and the career opportunities in technology which will be generated as a result.
So, how does Insurtech work?
Insurtech is the next step for insurance companies to take through which AI, IoT, cloud computing and Big Data technology can be implemented to improve how customer data is collected and processed in the aim to provide more accurate decisions regarding pricing and risk management, as well as to help form insurance policies which can be managed and applied to customers in a more efficient and meaningful way. Such digital innovation can help insurance companies better segment their customers, receive real-time data on a person’s behaviour and lifestyle, and by doing so, promote suitable insurance offerings based on various segments. By identifying and categorising services according to customer segments, insurance companies can then send notifications to their customers on medical, travel, vehicle or product insurance regarding updates on the latest policies.
Integration of AI & IoT
Artificial Intelligence in Fintech has already made waves, and now with Finance and Technology merging once more, Insurtech is the next upcoming focal point in this sector which will give greater opportunity for AI applications. Through the use of machine learning and pattern recognition, AI software can present chatbots which provide customers with technical support, assisting them in their questions and informing them about relevant insurance policies to help them decide on the most suitable cover they need. Through the gathering and evaluation of data, AI will aid insurers in setting more effective marketing and pricing strategies, boosting business operations.
IoT (Internet of Things) technology can gather detailed data about customers and their behaviour with their technological devices - for instance, in motor insurance, vehicles are being manufactured with in-built sensors to send insurance companies data on the driving behaviour of customers - speed limits, bumper-to-bumper incidents and vandalism can be detected and monitored and such data sent to insurers in order to better categorise drivers according to their behaviour and reward them financially in the most suitable way.
IoT technology can also connect smart appliances found in the home to the servers of insurtech companies - this way, detections of product fault or human-inflicted damage on a product can be better distinguished, along with the monitoring of private property invasion or disruption. Moreover, IoT-based appliances can send customers notifications if they are in need of servicing or repairs should there be a technological deficiency.
In addition, regarding health and life insurance, through the introduction of wearable technology such as smart-watches, smart-bracelets, and smart-shoe monitors, as well as apps related to health and fitness, insurers will be connected to their customers through these technologies which can send them data related to exercise routines and medical consumption.
Furthermore, Big Data and cloud computing technology come into play affectively through the opportunity to improve customer data segmentation and security, as well as detecting risk and fraud without the need of asking users personally, as their data will be shared through their devices provided that they comply with the insurance company’s terms.
What does this mean for Recruitment?
The importance of AI and IoT technology as current and upcoming trends in the Financial Services is pivotal in the development of the new sector of Insurtech, and it can therefore be understood that a multitude of career opportunities in software development will be available for professionals in Tech to consider. With Fintech companies growing steadily in Malta, there is no doubt that insurance companies will by time follow suit, meaning that the acquisition of talented and highly motivated professionals in tech, as well as determined professionals in finance with a willingness and enthusiasm to learn about new technological tools, will increase the demand for a skilled and experienced workforce.
So, as insurance companies begin to slowly but surely follow in the steps of Fintech companies, they will certainly seek to recruit talented individuals in the fields of computing and software development - Data Scientists and Software Architects, as well as Software Engineers, Business Intelligence Developers & Programmers would be needed to optimise digital strategies. Skills in the fields of technology would be necessary to allow greater career opportunities in Malta, and with careers in IT in Mauritius on the increase too, more Fintech job opportunities will continue to be on the table.
Corporate Services employment opportunities feature numerous roles in finance which will also demand a good working knowledge of these new technologies in order to better act on the data acquired. This means that banking and finance employment opportunities will begin to demand a basic know-how of analysing data through new technologies - the need for professionals in finance to embrace digital innovation has never been so great, and those who do possess knowledge on the latest technologies will be the more favourable pick.
For an individual looking to build a solid career in finance, the will to inform oneself on the risks and benefits of emerging technologies as well as how technology is transforming the financial services will surely prove beneficial, helping them to be a better rounded individual in their field.
The growth of technology must be accepted and embraced by professionals of all levels to strategically offer better services to clients and customers. Technology is promising an exciting time for the insurance industry which should be taken as an opportunity, rather than a threat. With all eyes on the continuous evolution of AI, IoT and Big Data technologies, current and prospective professionals in Finance and Technology are being trained to understand these technological tools to integrate in their business operations and use to their advantage within the Financial services industries.
Luigi Muscat Filletti
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