The financial services sector has experienced massive disruption over the last decade, with new technology bringing a wave of agile new players into banking, investment markets and a range of other areas. Insurance, on the other hand, has remained largely unchanged, with the leading companies still doing business in largely the same way as they have been for decades, if not longer.
But that is beginning to change, and innovative Irish companies are playing a leading role in the development of the new digital solutions which are set to transform this most traditional of industries.
"Insurance is the last bastion of the traditional way of doing things in financial services," says Enterprise Ireland Senior Market Adviser Jack Finucane Clarke. "Of course, they have been using algorithms and other tools to help price risk for many years, but that has been pretty much as far as it goes. Little has been done on both the supply side and distribution to significantly increase efficiencies globally. Technology adoption has been very slow, but that's starting to change."
That change is creating new opportunities and Irish firms have been quick to avail of them.
"Irish companies are very well positioned to take advantage of those opportunities," says Finucane Clarke. "We have an interesting confluence of a very strong international financial services sector and a young, vibrant indigenous digital technology industry. That has seen a number of Irish companies moving into the emerging insuretech space, and Enterprise Ireland has been helping them grow and scale internationally."
Indeed, Irish firms are already making a name for themselves globally in the critically important claims management and underwriting areas. "Claims management systems are the basic nuts and bolts of the insurance industry and Irish companies like DocoSoft and Fineos are right at the forefront there. Fineos has been phenomenally successfully in North America and around the world and is pretty much a household name in the industry now."
Less well known is Codeeast, which has developed a one-stop-shop for insurance automation that simplifies the process for signing-up new customers, underwriting and so on. "They have got some great clients already in both the underwriting and broker communities."
In the deep tech area, Describe Data has developed what it calls bionic underwriting technology.
"They are using AI to help underwriters to price risk more accurately. They got a place on the Lloyds Accelerator Programme and are able to sit in with agents to gain an understanding of the challenges facing them. We are also seeing other Irish tech companies which were not part of the insurance conversation moving into the space," says Finucane Clarke.
One example is Over-C, a facilities management and health and safety technology business. "They are using their technology to help insurers manage and reduce claims in the public space insurance area. That is very expensive to insure, but if you can use technology to make the space safer you can reduce claims significantly. You are talking about potential savings of tens of millions of euro for insurance companies and public bodies throughout the world."
Cybersecurity is another growth area. Another Enterprise Ireland-backed company, Getvisibility, is helping insurers to discover, categorise and classify unstructured data from documents and emails and other sources to better manage data risk.
"They are getting real traction in the market," says Finucane Clarke. "We are seeing a confluence of cybersecurity and data management in the post-GDPR world. We are also seeing a number of Irish companies doing some very interesting things with communications technology for the insurance sector. Solgari enhances the customer experience with its AI-powered Converse solution which provides seamless customer conversations across all channels, including telephone, browser, email, WhatsApp and other messaging services."
What all these companies have in common is their potential for rapid scaling. "While regtech and fintech have commanded most of the attention up until now, we have seen insuretech growing rapidly of late, in terms of the number of companies involved and exports. Insurance is a global industry, and we are working with our global network of Enterprise Ireland offices to help these companies deploy their solutions to customers around the world."
And there is no time to lose. "We are at a moment in time when we need to kick on and take advantage of the opportunities out there. Enterprise Ireland wants to hear from young entrepreneurs and companies who have ideas and technology that might be useful for the insurance industry. A younger generation has come into the C-Suites and boardrooms in the insurance industry. They have seen what technology has done for retail financial services and the asset management industry and they are keen to bring those benefits to the insurance industry. Irish companies can play a major role in helping them do that."
Sunday Indo Business