- The technology insurance landscape is expanding and forcing traditional insurance providers to adopt practices of "disruptive" insurance technology firms (InsurTech). The market for InsurTech continues to grow with one-third of customers dependent upon InsurTech, according to the 2017 World Insurance Report of 8,000 consumers surveyed.
- The survey, conducted by Efma and Capgemini, found more than half of traditional insurance companies favor a partnership or collaboration with emerging InsurTech while 35% want to develop their own InsurTech practices as not to miss out on a market or customers.
- Still, roughly 40% of those surveyed trust their traditional insurance provider over the only 26% who trust InsurTech partially due to the uneasiness of InsurTech’s emerging reputation.
Technology is disrupting every industry and its functions. The insurance market is the latest sector to adapt its offerings to the challenges tech presents to consumers. Three-quarters of insurers agree that adopting InsurTech is pertinent to providing evolving coverage needs.
The growing popularity of mobile payment applications, devices among the Internet of Things or even blockchain have consumers taking extra strides in protecting their data. The emerging market of InsurTech is gaining momentum in the wake of cybercrimes and data breaches. Insurance for cybersecurity is projected to increase 131% by 2020 after finding breaches for an enterprise can reach $861,000 for a single security incident.
Some companies, following ransomware attacks like Petya, were taking out K&K policies, or policies used to cover ransom payments in the wake of a kidnapping. However, coverage for ransomware is not explicitly outlined in many insurers’ K&K coverage. Companies are highly encouraged to take out cyber-specific policies.
While the InsurTech market continues to gain traction, the insured must understand that in contrast to conventional insurance coverage, not all assets that are lost can be restored.