09 May Robo-Advisors to Shape Future of Insurance
Automated advisory platforms or robo-advisors are expected to transform the way in which consumers interact with insurance companies in the not so distant future.
An insurance robo-advisor is a software application which can complete some of the tasks currently undertaken by insurance agents.
The key advantage of robo-advice is that you can provide a high standard of customer service to an unlimited number of people – consistently. Where traditional insurance support is available 40 hours a week, robo-advice is there to support you 24 hours a day, 365 days a week.
Robo-advice has been adopted by many leading firms in the fintech industry but take-up has been slow in the world of insurtech. The move towards automated advisory services has been driven by millennials, who prefer to conduct business with insurance apps and automated services for fast, instant and tailored advice.
Very few of the leading insurance companies have the in-house talent to develop the full capabilities of robo-advice and as a result are moving towards forming relationships with start-ups. Only last year, Northwestern Mutual Life Insurance bought Learnvest, a startup in robo-advice in a deal worth over $250m.
For the consumer, the main attraction of robo-advice is that they are provided with unbiased advice. With an insurance agent, there is a perception that the advice is influenced by the agent’s own commission structure. The robo-advisor is more objective and can consider many variables and product solutions to deliver unbiased recommendations.
The future of the insurtech industry is certainly exciting and the opportunities for insurance companies in Ireland are endless. Automated advice systems will not replace the human interactions that we have come to expect with insurance companies but it will play a big part in complementing the already strong service platforms.