“Insurtech: Exploring Types, Trends, and the Impact of AI on the Insurance Industry”

The insurance industry is undergoing a major digital transformation. The insurtech (a portmanteau of “insurance” and “technology”) that powers the industry is at the center of that, as companies integrate technologies like generative AI to make insurance more accessible, efficient, and tailored to individual needs.
This guide to insurtech explores how technologies such as AI, blockchain, the internet of things (IoT), and machine learning (ML) are reshaping the traditional insurance landscape. From digital platforms that offer seamless policy management to models like peer-to-peer (P2P) insurance and on-demand coverage, we’ll delve into the various facets of insurtech that are setting the stage for a new era in insurance.
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Insurtech refers to the use of technology to automate and enhance processes in order to cut costs  and improve efficiency in the current insurance industry model. Insurtech is a rapidly growing sector within the broader financial technology (fintech) space.
Insurtech can be broken down into several types and models. 
Digital brokers and platforms: These insurtech companies operate as digital-first insurance brokers or platforms, offering a range of insurance products online. They simplify the process of comparing and purchasing insurance, often providing enhanced customer experiences through user-friendly interfaces and personalized recommendations.
P2P insurance: P2P insurtech models involve groups of individuals pooling their premiums together to insure against a shared risk. In some models, unclaimed money can be returned to members or donated to charity, fostering a community-based approach. Lemonade initially started with a P2P model, and although it is evolving, the company still represents a modern take on pooling resources for insurance.
On-demand insurance: This type allows customers to purchase insurance coverage instantly and for a specific duration—often just for when it’s needed. It’s popular in travel, gadget, and short-term event insurance. 
Telematics and usage-based insurance (UBI): Particularly prevalent in auto insurance, telematics and UBI adjust premiums based on the actual usage or behavior of the policyholder. This is made possible through devices that track driving behavior, distance traveled, or other relevant metrics. Root Insurance offers car insurance based on driving behavior, tracked through a mobile app.
Parametric insurance: Unlike traditional insurance that pays out after assessing the damage, parametric insurance triggers a predetermined payout if certain parameters are met, such as a hurricane reaching a specific wind speed or an earthquake of a certain magnitude. Jumpstart Insurance provides earthquake insurance that pays out based on the intensity of the quake, not the incurred damage.
Microinsurance: Targeting low-income customers or those requiring small-scale