Things To Avoid When Building An InsurTech Company

Technology around us is transforming rapidly, and humans need to align themselves with such changing times. Every domain is either digital or in the phase of being digital. Gone are the traditional pen and paper days, when every process took many days to complete. One of the most modern changes has been the rise of the insurtech industry. Insurtech is a lot more than just the coming together of insurance and technology. It is into all the technological reforms related to making all the processes related to insurance convenient. As the term is inspired by fintech, meaning finance and technology, it is certain to impact the audience, as in major fintech companies greatly.

Traditional methods of applying for insurance are very tedious and time-consuming. Insurtech is here to solve these problems effectively. In addition, it is very common speculation that when a claim is made, insurance companies do not respond and take years to pass the bill; the coming of insurtech will indeed help solve this problem.

The data suggests that 70% of consumers consider technology a deep-rooted aspect of their routine, and 19% of them view it as an extension of themselves. These are really promising numbers for insurtech companies. Improving their products and services and targeting a tech-savvy audience will be a massive factor for growth. So, while planning to build a successful insurtech company, these are some of the factors that should be avoided and worked upon for a smooth onboarding:

  • Start And Work On All The Services Possible

There are a lot of factors that determine whether the company could start strong. Often, founders tend to focus on only a few services and strengthen them, which is the best possible way to start effectively. In the case of insurtech, it means only starting with a few major types of insurance and introducing the less popular ones slowly and steadily.

As everyone is aware of the seven major types of insurance, it becomes essential to include them. A large part of the community is unaware of the many subcategories, so introducing new policies can lead to confusion.

To ensure the proper functionality of the services you offer, it is important to focus on a few services and constantly keep improving them. If any confusion arises regarding the launch of any new insurance policy, the best person to go to is the consumer. Various types of simple surveys can be conducted to understand the customer’s interest in the new policy.

Promoting informative blogs and social media content will ensure the correct interpretation of various policies. Hence, starting small and slow will benefit your insurtech start-up rather than just trying to cover all the services just at the beginning.

  • Using All-Energy And Resources To Attract New Customers

It is tempting to promote services in the best possible manner, which is true. Promotion plays an important role in bringing potential customers. It helps a wider population to know about the company and understand the benefits of associating with it. But, in the heat of attracting new customers, sometimes companies tend to spend less time and effort on customer satisfaction. Especially in the insurtech domain, so sometimes, existing customers may feel side-lined.

Ensuring that the existing customers are happy with the services is necessary; instead of just selling them expensive insurance, understanding the actual need is essential. If the customer understands that the company is selling it to him and ensures that he has to pay just the accurate amount, he is very likely to form a long-term association.

As said, a happy customer is more vital for your success rather than a partially satisfied one. So, maintaining a perfect balance between promotions and user experience will give satisfactory results in the near future. Studies show that online reviews and testimonials influence 67.7% of purchasing decisions, far more than having successful advertising campaigns.

  • Not Using Artificial Intelligence, Machine Learning And Big Data

Improving technological reforms have become a part of our daily routine. Every day new reforms are replacing the existing ones, and we are exposed to some great techniques. So, constantly improving the technological aspects is crucial. Insurtech companies always have to be on their toes to provide the best possible services. Introducing application assistance and various customer support is not enough. People tend to develop trust in the organization when they see positive numbers, and for insurtech, having compelling numbers to show becomes even more important.

With the help of AI and ML, many types of threats can be avoided. They are one of the trending aspects when it comes to insurtech companies. Many aspects like loss anticipation, underwriting dispensation, claims reimbursement, fraud recognition, product estimating, sales, and user familiarity can be improved and made more efficient with its use.

These technologies will provide the customer with a high level of automation and provide intelligent solutions and suggestions, thus putting an end to person-to-person negotiations. The introduction of chatbots and voice assistant features to your product will enhance the user experience.

Telematics and UBI (User-based insurance) are amongst the services that are gaining popularity. To deliver such services, one needs to take the help of IoT (Internet of things); it is of major use while considering car insurances. A particular device is installed in the user’s car to monitor driving habits, and personalized insurance is curated with its help.

While we all are aware of the power of data, 95% of insurance executives claim that there will be advanced data analytics in the insurtech ecosphere. Big data analytics empowers customers to make risk predictions, improve underwriting effectiveness, and also unlock macro market trends.

  • Follow Traditional Insurance Policies

While switching from any trusted source to a new opening, the customer is always looking for the value addition that the company can make. There has to be something unique and attractive to drag the customers from the traditional companies who have developed trust for a long time.

There are a lot of factors that need to be changed when the insurance world is going digital. Insurtech firms need to avoid a lot of documentation and prerequisites. Providing simplicity to the consumer is necessary. Saving their time from unnecessary documentation will surely create a positive impact. Ensuring smooth onboarding is also important. Make sure that the technology you are using is quick and easy to operate.

Win them with your research! Providing relevant and useful data to the customers is a great way to be unique. Many insurance companies fail to provide customers with timely updates, and using hardcopy communication takes a lot of time, giving insurtech the advantage of being digital and generating required invoices and documents immediately.

  • Ignoring Cyber And Data Security

Now that the basic avoidable factors are covered, it becomes important to explore the responsibilities after the successful conversion of a customer. As technology comes with some part of its own risk, insurtech should be ready to face some great challenges.

Even after ensuring a smooth onboarding and great user experience, the tasks of insurtech are not finished. As all the processes tend to generate a lot of data, its security becomes an important factor in the long run. While Insurtech needs its customers’ personal details to function, it needs to be sure about its data security.

Insurtech generates tons of financial data daily, which often makes them prime targets for facing various malpractices. Nearly 51% of insurers think that data safety is the biggest challenge for insurtech companies.

So, having proactive and strategic methods for cybersecurity is necessary. Artificial intelligence, machine learning, and various types of blockchain projects will surely help create a secure storage network and identify any data breach immediately. Understanding and implementing cybersecurity is crucial for insurtech firms.

  • Not Working On User Experience And Design

Having a great product but not expressing it creatively can be a hurdle on the roadmap to success. Usually, booming businesses tend to focus on building the product more efficiently and effectively, which other successful companies have done. Still, in today’s modern era, the way you represent your services also plays a critical role.

Constant changes in the product to improve the user experience are a must. Identifying and immediately working on even minor bugs will create a great impact on the audience. One should always remember that the more convenience the customer receives, the more likely they will be converted into loyal ones.

Working on the design of the product is also vital. Taking the help of experienced designers who can create appealing and attractive graphics for your product will prove beneficial. Also, never undervalue the ability of social media to sit down and create effective and realistic social media goals to target an accurate audience and eventually boost sales.

So, these were some of the important aspects that are to be avoided while starting an insurtech company. Surely insurtech has a lot of potentials to be tapped in the coming years, and a wide audience is expected to be inclined towards them. Insurtech is the domain that needs continuous reforms. Every time a new idea is presented, it has to be implemented with great accuracy to generate desired results. Cost improvement is also one of the major factors that insurtech targets, as potential customers always seem to look for more financial benefits.

There is no fixed success path for an insurtech firm. They have to carve their way through challenges to make their presence worthwhile. Focusing on customer demands and ensuring the accurate functionality of the existing services will be an important factor for the company’s success.

Choose Mindbowser As Your Ideal Partner For Building InsurTech Software

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EndNote

Taking the help of some market giants in the field of new technology can also prove vital because established firms in AI and ML will create the perfect ecosystem for the functionality of the application and software, and more importantly, will help you in the field of cyber and data security. If you plan to build a successful insurtech company, avoid the above-mentioned factors and focus on creating the best user experience.

Content Team

This blog is from Mindbowser‘s content team – a group of individuals coming together to create pieces that you may like. If you have feedback, please drop us a message on contact@mindbowser.com
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