Insurtech is a new word that combines insurance and technology. Insurtech companies leverage technology to offer customizable policies and premiums, as well as easy access and management on the web or through an app.
Here’s what you need to know about insurtech and what it can do for you today.
- What is Insurtech and How are Insurers Using It?
- Definition of Insurtech
- How Insurtech is Reshaping the Insurance Industry
- Problems with Insurtech
- Examples of Insurtech Use
- 6 Best Insurtech Platforms
- Insurtech vs. Traditional Insurance
- Pros and Cons
- See What Insurtech Can Offer You
- Frequently Asked Questions
What is Insurtech and How are Insurers Using It?
Insurance is often thought of as an old and stuffy industry with the same old rigid policies. That’s where insurtech comes in.
Insurtech companies leverage technology like AI, blockchain, smart contracts and more to provide better, more targeted insurance products. This can include customizable policies and premiums, or better risk assessments that allow more people to access coverage. Of course, these new and innovative ways of offering insurance come at a price, which in this case means revealing your information and data.
Definition of Insurtech
Insurtech “refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model.”
How Insurtech is Reshaping the Insurance Industry
Insurtech is essentially changing the way that the insurance industry has operated for decades. Instead of assigning policies and premiums based on risk categories, insurtech aims to collect data that allows for more customized policies and competitive premiums.
Problems with Insurtech
It may not come as a surprise that traditional insurance companies are hesitant about the practices and goals of insurtech companies. The insurance industry in general runs on practices that have proven to be profitable for a long time. Since it has run so well and been so profitable, the insurance industry as a whole hasn’t had a reason to change things.
Most insurance companies have survived because of this cautious approach to doing business. Part of this cautiousness includes a hesitancy to work with startups, which is what insurtech companies are.
The problem is, insurtech companies need assistance from traditional insurance companies to manage risks and handle underwriting, amongst other things. There can also be some murkiness around whether an insurtech company qualifies as an insurance company.
Since the insurance industry is such a highly regulated one, if an insurtech company doesn’t qualify as an insurance company, it may not be able to offer the same guaranteed services to its customers.
Examples of Insurtech Use
Insurtech can exist in essentially any product within the insurance industry. This includes health insurance, car insurance, pet insurance, home insurance and more.
So, how can you tell if you’re dealing with a company that’s using insurtech? Here are some common examples that you may come across:
- A car insurance company that offers you a premium based on data from a monitoring device that you place in your car. This device can monitor several things, including how fast you’re driving, how often you brake hard and more.
- A health insurance company that provides discounts or other benefits based on data from a wearable fitness or activity tracker.
6 Best Insurtech Platforms
Believe it or not, you may have already heard of some insurtech platforms. These companies are often known as companies that offer the “best insurance rates” and seem to tailor themselves to younger audiences.
Get started with our picks for the 6 best insurtech platforms.
- Simple application process
- Instant decision on coverage. If approved, it can start immediately
- May not need a medical exam
- Competitive rates, more affordable than industry averages
- Excellent customer support
- No permanent life plans offered
- Higher rates for preexisting conditions
- No coverage if you’re over 65
Best for Life Insurance: Haven Life
Choosing how you’ll financially protect your loved ones isn’t an easy decision, but finding the right policy doesn’t have to be a complicated process, too. Haven Life is an insurtech making life insurance accessible to everyone.
Powered by Mass Mutual, Haven Life digitizes the life insurance application process, making it easy to get quotes, apply for and purchase your life insurance plan in one place. Haven Life has several products, including term life insurance, disability insurance, income protection and annuities.
Choose from Haven Term, their primary term life insurance plan, or Haven Simple, which offers a no-medical exam application process. Haven Secure is also a term life insurance product available using Haven Life’s insurtech-powered life insurance portal — with this plan, match your coverage to a recurring expense like your house payment. This will help ensure beneficiaries can pay for monthly expenses with a monthly benefit payout.
With Haven Term, which offers up to $3 million in coverage, you may also add the Haven Life Plus rider (for free!) that provides extra perks like a digital will. Haven Simple offers coverage as low as $5,000 and up to $500,000.
- Get coverage in as little as 90 seconds
- Most claims paid in less than 3 minutes
- Leftover premiums support charities you care about
- Buried utilities and equipment failure endorsements available
- Not yet available in all states
Best for Health Insurance: Lemonaid
Lemonaid is a telehealth service that you can use in lieu of traditional doctor’s offices. Instead of using traditional health insurance to cover your visits and medications, Lemonaid charges a monthly subscription fee for its services.
This fee is $25 per month for the first month, and $95 per month for every month after. The membership can be cancelled at any time.
Lemonaid can be accessed via its mobile app, which provides unlimited messaging with medical experts. You’ll also receive regular check-ins to monitor your treatment.
If you are prescribed medications, you’ll receive free and fast delivery of your prescriptions. Lemonaid is perhaps most known for its mental health services, but it can also address other medical issues such as migraines, skin conditions, sinus infections and asthma.
There are some limitations. Lemonaid may not be available to certain age groups or people with a history of medical conditions such as seizures and bipolar disorder. Lemonaid also cannot handle disability evaluations, workers’ compensation cases or time off requests. If Lemonaid is unable to treat you, you may be referred to an in-person medical professional.
- Fast quote process
- Complimentary smart home system in some states
- Claims concierge service
- Can’t file a claim online
- Not available in all states
Best for Home Insurance: Hippo
Hippo is known for its streamlined approach to homeowners insurance. You can get an insurance quote in under 60 seconds, and then complete the purchase of your policy online in as little as 5 minutes.
Hippo’s insurance policies are modern and based on the common ways we use our homes today. For example, Hippo’s coverage offers higher limits on your electronics and enhanced coverage on your home’s appliances.
Hippo offers some other unique benefits as well. Eligible policyholders receive a free smart home kit and a discount on their premium when the smart home kit is activated. You can also access virtual home maintenance services through Hippo Home Care for expert help and recommendations for in-person help if needed.
- Customer service staffed by licensed insurance agents
- Quick quote tool available for multiple insurance types
- Automatically receive estimates for bundled auto-home insurance
- Cannot view all quotes before scheduling a call with a representative
- Does not actually sell the insurance policies it quotes
Best for Insurance Quotes: Policygenius
When shopping for any type of insurance, it’s a good idea to compare insurance quotes to find the best deal. Policygenius is an online marketplace that makes it easy to compare your options and purchase the policy that is right for your needs. You’ll receive access to resources that can help you understand insurance policies so you can make the best, most informed decision.
You can use Policygenius to find accurate insurance quotes for life insurance, home insurance, auto insurance and more.
- Free to use
- Much faster than comparing policies on your own
- Saves an average of $961 per year
- No customer service number, but you can email or chat or ask one of Gabi’s insurance agents to contact you by phone or text
Best for Car Insurance: Gabi
Gabi is another tool that you can use to compare insurance rates to find the best deal. Gabi’s technology can use the information from your current car insurance policy to compare it with insurance quotes from other companies.
If you could save money by switching to another insurance company, Gabi will let you know. Then, if you want to purchase the new policy, you can do so directly through Gabi.
Gabi is free to use, and you don’t need to switch insurance companies if you don’t want to, even if Gabi is able to get you a lower rate. Most quotes from Gabi are available within minutes after you submit your information.
- Quick quote process
- Licensed agents to assist you
- Can choose from top insurance providers
- No mobile app
Best for Small Business Insurance: Simply Business
Simply Business offers access to affordable and customizable small business insurance quotes. To get started, all you need to do is fill out a simple questionnaire.
Simply Business will use your answers to put together insurance quotes that fit the needs of your business and industry. All of the quotes are completely transparent, so you know exactly what you’re getting before you purchase an insurance policy.
Simply Business works with the top insurance providers to provide you with quotes that you can easily compare to find the right fit for your business. It can help you find the best value on policies that range anywhere from general liability insurance to policies specifically for industries such as photography.
Insurtech vs. Traditional Insurance
Traditional insurance focuses on risk categories that have been around for decades. Policies and premiums are based on the risk category that you fall in. Your risk category is likely determined using a number of factors, such as your age, health, history and more.
Insurtech offers a new and innovative approach to insurance. In some cases, insurtech may provide you with access to customizable quotes from traditional insurance companies that you can compare.
Some insurtech companies offer their own unique insurance policies or devices that can help lower your insurance rates. Insurtech generally uses technology and data that is unique to the policyholder to determine rates and discounts, rather than lumping everyone into a risk category.
Pros and Cons
- Insurtech companies often focus on providing affordable insurance policies.
- Customized quotes are often available in a matter of minutes.
- Most insurtech platforms offer services that can be completed 100% online, saving you time and avoiding lengthy phone calls or wait times.
- Insurtech is newer and may not offer the same amount of protection as traditional insurance companies and policies.
- Since insurtech usually focuses on online services, there is rarely an in-person component for customers.
- Some insurtech may cost you more money — for example, if your car tracking device shows a pattern of unsafe driving, your rate may increase.
See What Insurtech Can Offer You
Insurtech platforms can offer you personalized deals, and the right platform can help you manage your health, auto maintenance and more.
Look into our top picks for insurtech platforms. Even if you don’t find a better policy, insurtech provides a fast and free way to know your options.
Frequently Asked Questions
Can an Insurtech service replace my insurance plan?
Yes. You may be able to replace your insurance plan using an insurtech service.
Can I save money using an Insurtech platform?
Yes. Insurtech platforms may be able to help you save money on your insurance policies.
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