Insurtech is the latest buzzword making the rounds within the chief experience officer (CXO) quarters of the insurance industry.

Unlike banking, insurance has never been known for its romantic pursuit of technology. But never has technology created so much buzz in the insurance industry as it has with this latest term.

Insurtech, a moniker adapted from its more famous cousin “fintech,” is not merely a combination of the words insurance and technology. Rather, it aptly symbolizes the disruption that technology is creating in the insurance business.

While fintech is disrupting banking industry processes by enabling newer ways of doing business, insurtech goes one step further in the insurance industry by disrupting its very business model and products.

Let's examine the “famous five” disruptive technologies of insurtech.

5 Artificial Intelligence

AI-driven cognitive robotic automation has tremendous potential to elevate the traditional, intricately-human, process-dependent insurance industry. Be it quote (and illustration), know your customer (KYC), or claims processing, insurance processes have traditionally been tardy, complicated, and documentation-heavy.

To add to these woes, human errors make the processes inefficient and expensive, leading to money leakage.

AI can take process automation to the next level, thereby reducing operating costs. Another area where AI is going to make a significant impact is service and engagement through on-demand robo-advisors or chatbots.

With payment of premiums and claims being the most likely and infrequent customer touch points, insurance has much to do in terms of customer engagement.

AI can help tremendously in these areas.

4 API and microservices

This is another area of technology that can help insurers up their game.

Core platforms and technology ecosystems are still heavily leaning towards older or legacy technology, and associated sunk costs. Insurers should aggressively use APIs (roughly, a set of clearly defined methods of communication between various software components) and microservices to decouple modular processes—that is, help modules interact with other modules simply, without their being dependent on each other—and expose them, such as providing the user with an interface to access them, so customers, agents and other partners use only the required services as and when they need them.

Exposing processes such as financial need analysis or changing of premium payment frequency can only help sell more and service better by putting power in the hands of customers.

3 Blockchain