InsurTech in 2022 will focus on consumer choice, research reveals

By Puja Sharma

It would be wrong to describe FinTech as the silver bullet to the host of challenges facing individuals this year. But, by taking a consumer-centric approach and adopting innovation in the sector, the business will find they can at least ease some of the pressures.

As such, Reassured, the UK’s largest life insurance broker, revealed its top predictions for FinTech in the second half of 2022:

As the cost of living crisis continues to bite over the second half of 2022, fuelled by an inflation rate expected to hit 10% this year according to the Bank of England, consumers need greater flexibility, efficiency, and advice on where best to put their money.

With the cost of living soaring, it is tempting for many consumers to cancel any insurance policies that seemingly offer no short-term benefits. But, as the last two years have proven beyond doubt, the importance of insurance, particularly a life policy, cannot be overstated.

It is up to brokers to ensure that the highest possible number of people have access to insurance. That means broadening how a policy can be bought, so, in the second half of 2022, we expect to see a greater number of brokers and insurers adopt digital solutions to complement core telephony-based sales.

It means putting the consumer first, expanding the number of ways through which they can access life insurance, and ultimately giving them a better level of service.

The changing face of insurance

The era of poorly coded, sluggish technology is over. Consumers have grown used to a level of service, brought on by the pandemic, which is defined by efficiency and ease of use, and the industry as a whole will make significant efforts to match this, by adopting AI, predictive analytics, and advanced chatbots over the next year. 47% of consumers now say they are open to parting with their money via a chatbot. As such, developing technology which improves the performance and quality of service, while providing access to insurance quickly, will be a key focus of the industry in the remainder of 2022.

Bid farewell to archaic pensions

With inflation at a 40-year high and the price of energy and food rising rapidly, consumers are having to make difficult decisions about what to prioritise. Investing in a pension is likely to slip down the agenda as the immediate benefits are not quite as visible.

The good news is that the acceleration in technology and the growth of digital pension challengers such as Penfold and PensionBee mean that consumers have far greater, immediate control over their pensions. Digital-driven providers can offer greater flexibility so that savers can adjust or even pause contributions seamlessly if they are struggling to manage day-to-day living costs, which is something that the more traditional providers simply can’t match. This greater level of flexibility and control will keep consumers investing in their future despite short-term shocks, giving them a more secure future.

James Turnbull, CTO at Reassured, said: “FinTech leaped to the challenge at the dawn of the pandemic by allowing essential financial services to continue to operate remotely and with greater efficiency. Now, it’s time for fintech to step up as the cost-of living-crisis intensifies.

“Innovative technologies in all areas of financial services have the power to grant consumers greater flexibility, greater security, and ultimately, greater freedom – all of which will help individuals deal with the toughest effects of rising living costs. But, it’s up to us as financial services providers to grasp these opportunities and lead from the front, by making use of the best of what fintech has to offer to put the customer first.” Turnbull added.

Tech to prevent fraud

Fraud losses following unprecedented amounts of financial support given to businesses and individuals over the pandemic were a painful reminder of the importance of adequate KYC checks. In the UK, an estimated £4.9b of taxpayers’ money was lost to criminals as a result of poor identity and verification (ID&V) processes. A primary focus for the second half of this year will be how we can stop this from happening again with technology solutions such as ID-Pal and Veriff, especially as the methods employed by fraudsters become increasingly sophisticated.