Innovation in Insurance through COVID-19

According to Aon’s 2019 Global Risk Management Survey a majority of businesses are mostly thinking about and researching issues that aren’t covered through insurance. Risk management is crucial to all businesses, and these businesses want to make sure they are covering all their bases.

The insurance world is an industry rooted in many traditional practices, which can make it more difficult to adapt to consumer demands. However, as with most global impactful times, COVID has pushed us into a time of innovation and created a shift where digitalization must be a top priority as businesses evolve and plan for the upcoming months and years.

Much of this evolution is around digital communication lines, including issuing invoices and accepting payments from customers. It can also include claim payouts, which can be needed quickly, and the process of mailing a check just isn’t cutting it anymore. 

This leads us to two newer and booming industries - FinTech and InsurTech.

Crunchbase reported a $9.2 billion increase in investing for FinTech start ups in North and South America between 2017 and 2018. This was acoss 700 known rounds of funding, meaning not just supergiant rounds on investments.

With insurance start-ups not far behind - an increase in $3.4 billion - this proves that FinTech and InsurTech markets are growing at an exponential rate. 

Insurance companies are quickly looking at how to best adapt and digitalize their processes in order to keep up with these advancements and consumer demands. By adapting, companies will become more resilient in an increasingly dynamic environment.

What does COVID mean for FinTech and InsurTech growth?

Luckily, insurance and payment processing are two areas that are not only needed, but actually in high demand during a pandemic. The industry is still pushing forward and showing signs of exponential growth, reflective of this.

Many FinTech companies have continued to make major hires, which speaks volumes to the health of the industry and strength of their growth. Innovation is revolutionizing these areas and showing massive resilience through the economic downturn. 

Rising generations are beginning to demand innovation and digital advancements from the companies they choose to engage with. Better yet, these younger generations are beginning to take over the majority of the purchase power in the economy

Legacy technology for a long time has stalled innovation within the insurance industry. However, insurance companies are proving to be nimble and creative to engage with innovative thinkers and doers to latch onto these younger purchasers. 

Innovation and Crisis

Pretty much all innovation can be traced back to a shift and major societal growth period that greatly impacted an area of business or a world event that drastically interrupted the way that we, as a society, move through the world on a day-to-day basis. 

For example, the e-check was created after check processing came to a crashing halt post-9/11. While processing payments electronically came along much earlier through automated clearing houses, the events of 9/11 catapulted most businesses into embracing electronic payment processing so much so that according to the National Automated Clearing House Association (NACHA), over 80% of working Americans now receive their check via e-check processing.

We are now in the midst of another major global event. With a pandemic rising, many countries have shut down causing an economic downturn. Although this is stressful, it has definitely resulted in innovation in order to increase resiliency and promote recovery.

This is the time for companies to reinvent themselves and adapt in order to address the quickly changing environment.

How does that impact FinTech, insurance companies, and digital payments?

Touchless interactions are more and more on the rise as people are looking to keep some distance and are hyper aware of high traffic areas and sanitary precautions. Mastercard reported that more than 51% of consumers are using a form of contactless payments

This has risen so much that the Touchless Transaction Act of 2020 was even enacted. This means that an issuer of an EFT cannot require an individual’s signature at point-of-sale.

These changes are pushing companies forward into a new era of tech. Digital payment processing will become a standard consumer expectation. Now is the time for insurance companies to adapt, especially given the health and home repercussions of the global changes.

Integrating a system that automates your invoicing streamlines the process internally. With the invoices being delivered automatically via email or text message, consumers are able to click on the link and pay the invoice quickly and easily. Once the funds are validated and posted, the integrated broker management system is updated in real time. 

Cash flow is crucial through these times, especially in insurance. With SimplePin not only can you fully integrate and automate your payment processing system, but you’ll also have access to those funds within 24 hours.

Interested in learning more about this software? Want to know more about SimplePin? Call our toll free number: 1 800 727-4136. You can also email us at info@simplepin.com, contact us or even request a demo with one of our product specialists.