A new market report from Juniper Research predicts that fintech platform revenues derived from supporting the insurance industry will reach nearly USD 235 billion globally by 2021, which is up 34% year-on-year from an estimated USD 175 billion in 2016.
Machine learning investments enabling insurance providers to personalise products; insurers deploying mobile apps to improve their customer experience; investments in blockchain technologies to underpin smart contracts, are said to be the combined factors responsible for the growth of the platform.
The report titled “Fintech Futures: Market Disruption, Leading Innovators & Emerging Opportunities 2016-2021” argues that the value chain in the insurance market is transforming at an accelerating rate, which is expected to force traditional providers to improve their offerings and customer service to obviate the threat posed by fintech suppliers – mainly in the car insurance sector.
Car insurers who have invested in machine learning are able to more accurately reflect car usage and driving behaviour in their quotes. As machine learning improves insurers’ ability to stratify drivers into risk groups, Juniper believes that the technology will be used more widely in the insurance market to deliver quotes for contents insurance precisely reflecting the value of applicants’ possessions.
The research firm also forecasts that blockchain will speed up insurers’ ability to personalise products with smart contracts/ smart policies adapting automatically to customers’ changing circumstances.
Research author Michael Larner says: “Insurers need to be transparent with regards to how they use customer data. While consumers need to accept that in order to receive tailored polices that they will come under greater scrutiny. The prospect of saving money will be the overriding priority for the majority of consumers”.
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