The Fintech industry has grown rapidly in recent years due to a number of disruptive technologies such as digital payments, peer to peer lending, and wealth management. However, if there is one industry that has managed to stay away from the disruption in recent years is the Insurance industry. The Insurance industry is still old school, where most of the business is run on paper. Home insurance companies haven’t adapted to the Air BnB model nor have the car insurances companies revamped their model to suit ride-sharing companies such as Uber, Lyft, Scoop. The good news is that off late there has been a huge spike in funding for insurance technology, which rose from $740m in 2015 to $2.7 bn in 2016.
The U.S. insurance industry would be the ideal market to target since it is the largest in the world, with annual revenue crossing a trillion dollars. The US insurance industry also has hardly had any technological innovations making it a perfect industry for start-ups.
The start-ups could target different parts of insurance, such as the use of analytics to make better decisions, Blockchain technology. Fintech’s disruption of the insurance industry has already begun, kicked off by two successful startups, Oscar in the field of health insurance and Metromile which offers pay-per-mile car insurance.
The success of the startups is a good sign and it is high time this industry changes for the good. The insurance industry has been way too old fashioned and the process of claiming insurance is a painstaking process. I expect a number of startups targeting this space, and it hopefully the disruption will cause a change in how the whole insurance process works.
References:
http://www.investopedia.com/articles/insurance/121416/could-fintechs-insurance-innovations-disrupt-industry.asp