Financial Technologies in
Insurance Industry
(InsurTechs)
Team 6
Main drivers of Innovation in Insurance Sector
1
Technological
Advancements
Economical 2
changes
Changing Customer
3
Expectations
Shift to Customer-Oriented Approach
Product-
Oriented
Customer-
Oriented
Strengths of InsurTechs
● Home insurer Lemonade, has AI technology which was able
to settle theft claim in three seconds, without paperwork
01 Customer Engagement ● Vantis Life developed a platform which underwrites life
insurance based on public records allowing customers to
avoid passing medical tests
● Trov enables customers to activate and deactivate
the insurance based on the usage behavior
02 Usage-Based Insurance ● Metromile offers pay-per-mile insurance for city
dwellers that who drive only occasionally
● Shift Technology leverages the best of data
03 Big Data and Analytics science to automatically detect networks of
fraudsters in insurance.
Challenges Faced by InsurTechs
Regulation Issues
• Insurance is highly regulated with many layers of
jurisdictional baggage, which pose difficulty for
InsurTech startups
Difficulty in understanding AI
• As AI becomes more and more sophisticated, actuaries
and rate reviewers are being challenged by classifying
risk factors
Facts about InsurTech Sector
41% $8.5bn 599
is the rate at which the was raised by InsurTech deals completed during the
global InsurTech market is firms globally between 2014 period from 2014 and 2018
expected to grow annually and 2018
between 2019 and 2023
Global InsurTech Investment
Global InsurTech Investment, 2014-2018 (in $)
• Funding increased
more than six-fold
during the past 4 years,
reaching a figure of
3,177bn
• Regarding the figure
for deals, it
experienced
fluctuations during 4-
year period
Global InsurTech Investment by Quarters
• The figure for Global
InsurTech Investment
constituted a 664.6m in
Q4 of 2018 which is
approximately 80%
higher than in Q4 of
2017
Global InsurTech Deals by Region
Global InsurTech Deals by Region, 2014-2018 (as a % of total number of deals)
• 312 deals out of 600
have been completed
in North America.
• The decline of deals in
the North America is
due not to the decline
in the number of deals
but due to rapid
growth elsewhere,
especially Europe and
Asia.
Primary Sectors of Interest for top 100 InsurTech Companies
Insurance Types Number of Insurance Types Number of
Ventures Ventures
General Insurance 43 Motor Insurance 9
Health Insurance and 16 Property and Motor Insurance 5
Employee Benefits
12 Cyber Insurance 2
Property Insurance
Life Insurance 4 Pet Insurance 1
Commercial Insurance 7 Travel Insurance 1
Number of Ventures by Trend
Trend Number of Trend Number of
Ventures Ventures
Customer-Centric 68 Chatbots 5
Improvement P2P and sharing economy 5
New Distribution 63 Payment Methods 3
Channels Robotics 3
Data Analytics 37 Autonomous and unmanned 1
AI and Machine 33 vehicles
Learning Biotechnology 1
Hyper-personalization 32 Virtual Augmented Reality 0
16 • Customer-centric improvement has the highest amount of ventures
On Demand
as insurers strive to meet customer demands of simplicity,
Internet of Things 13 transparency and engagement
• Lion share of start-ups leverage the power of AI and machine
Blockchain 5 learning as the technology begins to mature
US-based InsurTechs
• Health insurance and
employee benefits
• Life Insurance
• General Insurance
• Property Insurance
Europe-based InsurTechs
• Health insurance and
employee benefits & Life
Insurance
• Property Insurance
• General Insurance
• Commercial Insurance
Asia-based InsurTechs
• Health insurance and
employee benefits
• Life Insurance
• General Insurance
Overview of Insurance Industry in Kazakhstan
• 27 Insurance organizations, 7 of them are life insurance organizations
• As of may 2019, net income of the insurance sector has amounted to
21.3 billions KZT, which is 3 times higher than it was at the same
period 2 years ago
• According to National Bank of Kazakhstan, for the past 5 years, total
assets of insurance companies experienced two-fold increase reaching
a figure of 1 trillion KZT in 2018
• 2020 promises a favorable prospects for insurance sector, as
Kazakhstan enters World Trade Organization (WTO) and opens gates
for international companies
Overview of Insurance Industry in Kazakhstan
Overview of Insurance Industry in Kazakhstan
Income (in billions KZT) of Insurance Potential reasons for the
Companies from January to May, 2015-2019 drop in income in 2017:
1) KZT revaluation
2) Slow growth in the
collection of insurance
premiums.
Overview of Insurance Industry in Kazakhstan
Overview of Insurance Industry in Kazakhstan
Challenges Faced by Traditional Insurance Industry in
Kazakhstan
1 Voluntary insurance of life and health, property and business
insurance against risks are not sufficiently developed
Capitalization of insurance companies is not enough in order to
2 fully take on insurance risks, automate work and develop products
Insurance companies experience high costs due to inefficient
3 reinsurance and significant commissions to insurance intermediaries
Online Insurance Statistics in Kazakhstan
January • The introduction of electronic 1) Employee training
policies to customers by 2) Rent
2019
insurance companies allowing 3) Working processes
to save resources and time on: 4) Production of paper policies
• 1 million e-policies were sold in the Kazakhstan,
accounting for about 20% of average annual sales volume
March
2019 However,
• The penetration degree of motor insurance e-policies
reached only 0.6%. According to the market experts, by
the end of the year 2019 online sales may reach 2-5%
Challenges Faced by Online Insurance & InsurTech companies
Unified Insurance Database
• Integration of UID with government bodies led to technical difficulties
• Because of reduction in budget, Ministry of Digital Development, Defense and Aerospace
Industry of the Republic of Kazakhstan reduced throughput channel through which all
government databases were connected
Financial & Technological illiteracy of the population
• Skeptical view towards technology and online purchases
• A lot of people still want personal communication with insurance brokers and demand
physical confirmation of purchased insurance policies
Regulation issues within insurance sector
Not adapted tax system for fin-tech companies
Weak cybersecurity
• Development of cloned websites by fraudsters to abduct money and low protection of
privacy
Unattractiveness of Kazakhstan market for international investors
• Due to insignificant amount of economically active population (9 millions), such a small
market is interesting mainly for investors from Russia or CIS
Ratings of Prospective Pillars within Fin-tech Market - 2020
• Some of the most
promising pillars within
fin-tech market in the
world as well as in
Kazakhstan are scoring
and digital banks, while
insurance constituted the
lowest rating
Potential prospects for Online Insurance & InsurTechs in
Kazakhstan
Role of AIFC
Development of AIFC’s own Transparent and
independent insurance database system Independent Legal System
Business Ecosystem Tax Exemption Benefits
