Chapter 7: Digital Innovation in Insurance

In the past decade, the insurance business has experienced remarkable growth, as evidenced by the introduction of numerous novel products such as chatbots, digital claims, telemetric insurance and robo-advisors. The insurance industry is also experiencing a significant transformation resulting from the digital transformation. The use of digital technology opens the door for inventive architectures and the development of innovative products in the future that will benefit both insurance companies and their clients. By integrating Internet of Things devices, digital innovation revolutionizes how insurance companies collaborate with industries, ultimately benefiting all parties. This chapter reviews the history of digital innovation in insurance, also known as insurance technology (InsurTech), as well as how technology has underpinned the expansion of InsurTech in recent years. The chapter also examines previous and current studies on the use of technology in insurance transactions and how the implementation of digitalization affects the industry’s long-term viability. The research identified three key InsurTech concepts that have revolutionized the insurance sector. New entrants could disrupt the entire insurance distribution process and introduce new consumer value propositions to attract and retain clients, challenging current business models. InsurTech improves incumbent insurers’ value chain by providing innovative technologies and solutions that boost efficiency and reduce costs.