InsureTech

What Does InsureTech Mean?

InsureTech refers to the use of emerging technologies by insurance companies. It is a portmanteau of the words “insurance” and “technology.”

Insuranceopedia Explains InsureTech

Insurance companies typically rely on a variety of analog tools and older processes to sell and price their products. For example, actuarial tables use traditional statistical models that consider broad demographic factors, such as age, sex, and geography. However, insurers can adopt InsureTech solutions to conduct more detailed analysis and offer premiums based on an individual policyholder’s behavioral patterns.

One example of behavior-based pricing in practice is usage-based car insurance, which uses telematics data to price policies according to how a person actually drives. Auto insurers like the ones covered in the Root Insurance review and Lemonade Auto Insurance review are often pointed to as examples of InsureTech in the consumer market.

InsureTech often incorporates emerging financial technology, or FinTech, to attract new customers or enhance offerings to existing ones.