The insurtech ecosystem in Spain in 2023: keys, difficulties and challenges

The insurance industry It has experienced a great digital transformation in recent years that has allowed it to evolve and grow by leaps and bounds. However, many wonder about the future of the insurtech industry. 2023 will come clearly marked due to the technological commitment of the different players in the marketwhere both investors and consumers demand innovation and it is expected to materialize through the creation of alliances, especially with the traditional sector, and the commitment to technologies based on the Internet of Things (IoT), cybersecurity, predictive analysis and intelligence artificial

Given this scenario, it seems clear that the future is going through digitization, which allows improving the relationship with the customer by making them feel more supported and protected, reduces risks and costs, optimizes processes and increases profits. As indicated by wefox, new technologies improve the reputation of the sector by satisfying customer demand with agility, precision and speed through cross-selling, without losing sight of the human side, offering the products that best meet the needs and lifestyle of the insured.

Seeing the direction in which the world is moving, increasingly digital, wefox experts highlight the main keys, challenges and difficulties in Spain for 2023:

The exponential growth of investments in Insurtech companies

Insurtech investment is at a boom, globally exceeding 9.3 billion euros in 2021, 38% more than the previous year (global report ‘Insurtech Global Outlook 2022’). And, it is that, despite the impact of the pandemic, this sector has been strengthened over the last two years in which the number of investment operations has not stopped growing, as well as the acquisition and merger, which makes clear the high interest of investors in this type of company.

The value of innovation and technology at the forefront

One of the great advantages that insurtechs have is that they were born with technology integrated into their DNA and can carry out successful technological developments simpler way. For example, Big Data is the main key for this type of company, since it considerably favors business operations by offering more detailed information on consumer behavior and consumption habits. Taking into account the moment of change, everything points to the fact that by 2023 the trends that investors will be most interested in are the Internet of Things (IoT), cybersecurity, predictive analysis and artificial intelligence. .

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In this sense, AI represents a great advance when it comes to increasing customer satisfaction by being able to consider them a priority throughout the process without having to exhaust the resources of insurers. For this reason, it is increasingly considered more important to invest in artificial intelligence since with this type of technology it is possible to attend to each and every one of the needs of customers with the speed and frequency they desire.

Change in customer behavior due to the appearance of new needs

With the advent of digital transformation, it has been possible to appreciate a change in the way consumers act, generating new needs: saving time, better prices, product differentiation, personalization and access to a greater range of options. Artificial intelligence, the internet of things, cloud systems or big data are just some of the new methods through which companies can learn more about their customers and better adapt to their needs.

And it is that, in the specific case of insurtechs, what customers will value most are the experiences obtained, the ease of doing things, the immediacy and, above all, customization. This produces a feeling of security and protection, knowing that at any time and in a simple way, through a computer, mobile phone or tablet, they will have a professional on the other side to assist them and offer them an exceptional customer experience.

There is still a certain difference between the European and Spanish markets

The development of insurtech companies has not occurred equally in all European markets. In the case of Spain, it is true that the growth of this sector is booming, but there is still a long way to go since there is still a gap between the Spanish and European markets. One of the great handicaps of this situation refers to investment in insurtechs, which in Spain barely represents 0.214% of the world total.

According to the AEFI, Spain is in a good position, ready to give the definitive changeIn fact, 13% of Spanish insurtechs are already present in international markets. However, to continue growing and reach the competitive level of the European market, Spanish technology companies must face two key challenges: integration with insurance companies and return of value and essence to insurance seeking the quality of the customer experience. .

Alliances between traditional insurers and Insurtechs to reach customers more effectively

The impact of recent years has shown the insurance sector that it needs and must adapt to digitization in order to modernize and improve the industry. In addition, with the increasing emergence of more mature insurtech companies, there has been an increased use of cloud storage, AI and data analytics in the sector, which has allowed them to move from being mere intermediaries to becoming companies of fully insurance, leading the way in the evolution of the insurance industry.

However, although this insurance sector is one of the most traditional, the line between life insurers and insurtechs is blurring. it is becoming more common see how beneficial alliances are produced between these two models in order to offer the client a more efficient service by combining the experience of a sector with many years, together with the high technology of the newest. Looking to 2023, it is expected that this type of alliances and collaborations will happen more frequently, thus allowing the technological transformation of the entire industry.

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