Billion pound investment in insurance tech fails to impress

Billion pound investment in insurance tech fails to impress

Customers and brokers remain disconnected from insurtech despite $1.8bn-worth (£1.35bn) of investment into the sector in 2017, according to a report.

Legacy systems and the slow pace at which start-ups are able to grow mean many people have yet to see the benefits of technological innovations, according to a survey of 1,500 consumers and 100 insurance industry professionals by Consumer Intelligence.

The survey suggested one in five insurance brokers blames technology for difficulties they experience when dealing with insurers.

In addition, 70 per cent of customers claim their insurer is no easier to deal with than two years ago - despite the high levels of investment in technology.

What’s more, despite consumers’ demands for transparency and simplicity, 61 per cent of customers believe insurers make ‘claiming’ deliberately confusing.

Just one in ten consumers fully understood their policy cover, claiming jargon and long and complicated terms and conditions acted as barriers to comprehension.

And while the vast majority (96 per cent) of insurers ranked technology as the top investment priority, a third believe insurance is five years behind the digital curve.

According to the research, large corporates are still beginning their digital transformation, while start-ups lack the customers and data to launch at scale.

Matt Connolly, chief executive at Tallt Ventures, a data driven insight and intelligence business, said: “Our most recent research indicates that not all insurers are positioned to answer the demands of their customers, as they are hindered by age old legacy systems. 

“It is clear that there is a disconnect between the initial promise of the insurtech revolution and the current reality experienced by millions of customers, who feel sold short.”

Daren O’Brien, director at London-based Aurora Financial, commented: “They do have issues with legacy systems, and with all the mergers and acquisitions that have happened it does not make it easier for them.

“When customers take out a new product, it is all singing, all dancing, but on any older plans we are talking about legacy systems that have been around for 20 or 30 years. It is too expensive to move them across to new systems, or they are not compatible with the new systems.

“It is only in the last decade that we have seen technology driven forward. It does cause massive problems - the information is never readily available and it takes ages to get the information, or they have outsourced their legacy plans to other companies.”