The InsurTech sector has boomed over the past few years, but there are still common myths about the sector that need to be debunked.
Cloud Insurance, a SaaS solution developer, has released a new blog post clearing up misconceptions around the InsurTech sector.
The first myth it tackles is the idea that a business has more important things to do than implement InsurTech services. Cloud insurance explains this is simply not the case. If an insurer decides to ignore the use of technology, their competitors will leave them in the dust.
A study from Spiceworks found that 44% of companies in insurance are planning to increase their digitalisation efforts. While a report from Oracle claimed businesses utilising emerging technology increased their annual revenues 58% faster.
There is strong demand for InsurTech solutions and the benefit the technology can have is becoming clear. Last year, a total of $7bn was invested into InsurTech solutions around the world, according to FinTech Global’s data. Appetite for the sector is only increasing, with H1 of 2021 already seeing $6.4bn invested worldwide.
Myths are not just around the quality of the market. The second myth Cloud Insurance debunks is the idea InsurTech solutions are more expensive.
It said, “InsurTech is not expensive if you approach it right. Don’t start with massive, long projects – go for MVP instead, and take it step-by-step. When selecting a platform, look for cloud-native, customizable, insurance-specific technology to configure on the fly. There is no heavy price tag, rather more agility and flexibility than any legacy system could provide.”
The third myth to be cleared up by Cloud Insurance the notion that building a system internally is better than using a vendor. Cloud Insurance states this is simply false. Citing data from Cisco, which claims 73% of IoT projects fail due to limited expertise, budget overruns and low-quality data, the InsurTech company claims it is far easier to use a vendor.
It stated that in-house developments can remove focus away from growing the business and relocate resources away from marketing and sales efforts. As a result, it claims using a vendor is a fraction of the money that would be spent on hiring a CTO, a development team, and ongoing maintenance and upgrades.
The fourth myth is the notion that it is not the time to upgrade old systems. Cloud Insurance agrees change is always difficult, but the longer a company decides to wait before replacing old technology, the harder the transition will be.
Finally, Cloud Insurance said the myth around large vendors being better than startups is not true. It said, “In reality, it’s the other way around. Startups are often more flexible, more innovative, and deliver a better service than larger vendors.”
Read the full blog post here.
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