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Insurtech trends and its reshaping of Insurance
Insurance Technology (Insurtech) refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. Insurtech is a combination of the words “insurance” and “technology,” inspired by the term fintech. It is of utmost importance to embrace digital technologies for insurers and enhance their presence in the marketplace to gain market share with the increased customer base and custom offerings.
The belief driving insurance companies and investments by venture capitalists in the space is that the insurance industry is ripe for innovation and disruption. Insurtech is exploring avenues that large insurance firms have less incentive to exploit, such as offering ultra-customized policies, and social insurance, and using new streams of data from Internet-enabled devices to dynamically price premiums according to observed behaviour.
Understanding Insurtech and its global impact
Insurance is an old business, one of the oldest financial businesses and it tends to favour those with deep pockets and long experience in the market. Traditionally, broad actuarial tables are used to assign policy seekers to a risk category. The group is then adjusted so enough people are lumped together to ensure that, overall, the policies are profitable for the company.
This approach does, of course, result in some people paying more than they should be based on the basic level of data used to group people. Among other things, Insurtech is looking to tackle this data and analysis issue head-on. Using inputs from all manners of devices, including GPS tracking of cars to the activity trackers on our wrists, these companies are building more finely delineated groupings of risk, allowing products to be priced more competitively.
In a global market, Insurtech is developing solutions like ultra-customized policies, social insurance, and dynamically pricing premiums utilizing new streams of data from Internet-enabled devices. Insurtech assists insurers in collecting and analyzing consumer data that may be used to target the proper client at an affordable price. Insurtech also aids in creating better projections of consumer demands, purchasing quantities, and decision-making and insurance planning through the usage of machine learning, artificial intelligence, and cloud computing.
According to the Insurance Barometer’s 2021 survey, 36% of American respondents planned to get life insurance in 2021. Moreover, insurance companies are progressively investing in digital technologies to cut costs, increase productivity, and improve the overall client experience.
The global InsurTech market revenue is valued at $532.7 million in 2018 and is expected to reach $1,119.8 million by 2023, growing at a CAGR of 16.0% during the forecast period 2018-2023.
Covid-19 as the emergence of Insurtech improvement
The global health crisis has had a positive impact on Insurtech market growth as insurance policies increased tremendously among customers. Policies such as health insurance, personal insurance, and home insurance have increased rapidly in the market to provide advanced tech-based services to customers.
The banks and financial institutions are witnessing transformation with the emergence of FinTech vendors, thereby disrupting the traditional model of operations and processes. Insurers face stiff competition, and the insurance market is considered mature in most countries. The digital and analytical tools have opened new revenue models and value chains through digital brokers. The market size value in 2022: -USD 5.45 billion
Benefits and Vendors
The report contains an in-depth analysis of vendors' profiles, which includes an overview and offerings; and a competitive landscape. The emergence of technologies, such as AI and ML, is impacting the market growth and organizations are adopting InsurTech solutions for the online marketplace and easy claims processing among others.
The FinTech industry, over the last couple of years, has realized the need and opportunity for InsurTech software. The InsurTech vendors offer software that simplifies the decision-making process for the customers, and the analytics software helps insurers to understand the current need and demands in the market.
Criticism of Insurtech
Although many of these innovations are long overdue, there are reasons why the incumbent insurance companies are so reluctant to adapt. Insurance is a highly regulated industry with many layers of jurisdictional legal baggage to deal with. As such, the major companies have survived this long by being incredibly cautious, which has made them shy away from working with any startups—let alone startups in their own, very stable industry.
This is a bigger problem than it sounds, as many of Insurtech startups still require the help of traditional insurers to handle underwriting and manage catastrophic risk. That said, as more Insurtech startups garner consumer interest with a refined model and a user-friendly approach, they may find that the incumbent players warm to the idea of Insurtech and become interested in buying up some of the innovation.
Angola Tops Nigeria as Africa’s Biggest Oil Producer in August
According to a Bloomberg survey of monthly output, Nigeria loses its crown as Africa’s largest producer for the first time since 2017. According to the survey, Angola produced a total of 1.17 million barrels in the month of August, exceeding Nigeria’s 1.13 million barrels.
According to Bloomberg, Nigeria’s oil production has been on a consistent decline since 2020 and the government has blamed massive levels of theft on the pipelines that crisscross the oil-rich Niger Delta in Southern Nigeria. According to the survey, Libya came in a close third at 1.07 million barrels and is projected to surpass Nigeria in the coming months.
The Nigerian Upstream Petroleum Regulatory Commission's statistics present a grimmer picture, with output last month coming in at just 972,000 barrels per day. When condensate, a light hydrocarbon that is free from OPEC limitations, is added, the amount increased to 1.18 million barrels.
Nigeria’s exported goods were worth N7.4 trillion in Q2 2022, the highest on record
According to the National Bureau of Statistics' most recent report on foreign trade, Nigeria exported goods worth N7.41 trillion in the second quarter of 2022, a 47.5% rise over the N5.02 trillion reported in the same period of 2021.
Additionally, export value increased by 4.3% from the N7.1 trillion reported in Q1 2022 to the preceding quarter. Notably, Nigeria's exports during the study period were the highest recorded. Nigeria's trade balance climbed to a surplus of N1.97 trillion as a result of the rise in export revenues, the greatest since Q2 2018.
The list of the African giant's top exports, which includes urea after crude oil and natural gas at the top, remains the same. The total amount of crude oil exported in the reviewed period was N5.9 trillion, representing an astonishing 45.1% year-over-year growth.
Capital inflows into the Telecom sector hit $153.5 million in Q2 2022
In Q2 2022, the Nigerian telecommunications industry drew capital imports of $153.5 million. While this was the sector's largest inflow in the previous six quarters, the amount was above the $107.46 million that the sector saw in the entire year of 2021.
The National Bureau of Statistics (NBS) reported that the capital importation figure for the second quarter of this year increased by 165% over the $57.79 million the sector drew in the first quarter.
Did you know
In the US, before the creation of the Federal Reserve in 1913, each bank printed its own money.
Box Office Banger
The Lord of the Rings: The Return of the King (2003)
The Lord of the Rings: The Return of the King is a 2003 epic fantasy adventure film directed by Peter Jackson from a screenplay by Fran Walsh, Philippa Boyens, and Jackson, based on 1955's The Return of the King, the third volume of the novel The Lord of the Rings by J. R. R. Tolkien. The sequel to 2002's The Lord of the Rings: The Two Towers, the film is the final instalment in The Lord of the Rings trilogy.
Quote of the week
“It is better to ask forgiveness, than permission”
Grace Murray Hopper