Why Has Insurtech Been Slow to Adopt New Technologies?

Health insurance is more than just a healthcare decision — it’s a financial one. The high cost of healthcare in America can be devastating for families without adequate coverage.

Health insurers’ profits rose to $17.3 billion in 2021, up from $15.4 billion in 2020 — there’s little incentive to risk transitioning from a model that’s already beneficial. As a result, most insurance companies have been slow to embrace new technologies that make it easier to find affordable, quality healthcare.

Research from Information Service Group (ISG), found that 60% of processes in the insurance sector still rely on paper. Legacy systems are slow and tedious compared to modern technologies, making digital transformation an arduous process.

Change is happening, but it’s happening slowly. Luckily, there are some newer health insurance platforms that are embracing innovation and emerging technologies to create a fresh user experience for those looking to explore health insurance options.

What Is Insurtech?

Insurtech is a portmanteau of the words insurance and technology, and, similar to how financial startups adopted the term FinTech, refers to companies that are using innovative technologies to develop modern solutions, cut costs, and pioneer a new customer experience within the insurance industry.

Despite the technological advances in artificial intelligence, machine learning, and predictive analytics, most insurance companies still operate the same way they have for years. This makes the insurance industry ripe for disruption by companies that are willing to challenge the status quo and provide more affordable, high-quality options for consumers.

Why Has the Insurance Industry Been Slow to Adopt AI and New Technology?

There are several reasons why the insurance industry has been slow to invest in insurtech solutions. Here are some of the most common ones:

• Focus on cost savings: Adopting new technology involves incurring a certain amount of risk; many health insurance providers will prioritize cost reduction over digital upgrades — even if they come at great benefit to consumers.
• Profitability: Major insurance firms are posting record profits, leaving little incentive for them to fix a system that’s heavily skewed in their favor.
• Limited competition: A small number of companies take up a large share of the market leading to limited competition. This leads to a lack of a competitive landscape — despite the abundance of innovation and tech solutions being deployed in other industries.
• M&A activity: The insurance industry has become disjointed due to mergers and acquisitions (M&A). Many companies are still struggling to integrate legacy systems into a centralized platform. Data sharing that could help improve the customer experience and provide insights is often siloed.

The insurance industry’s technological stagnation has led to an increasingly poor user experience, given the consumer-centric nature of other, more competitive industries.

The economy is evolving, and the insurance industry must adapt to the needs of modern employees; gig workers — freelancers and other workers engaged in nonstandard employment arrangements — make up roughly one-quarter of the American workforce. Without employer health benefits, they’ll need access to affordable, high-quality healthcare suited for their lifestyle.

KindHealth is disrupting the health insurance industry by being the first company to leverage data analysis to create specific insurance strategies. Fully supported by artificial intelligence, KindHealth protects families from financial hardship and ensures consumers get the health coverage they need.

Innovative, Easy to Use Platform to Make Better Health Insurance Decisions

KindHealth is bringing much-needed change to the insurance industry with its innovative, user-friendly platform that uses AI to connect families with the ideal insurance options. KindHealth helps you evaluate the best plans and choose the right strategy that fits your lifestyle.

Avoid the risk of crushing medical debt, and free yourself from the burden of unexpected healthcare costs.

To learn more, visit KindHealth today.

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About KindHealth

KindHealth is an insurance discovery platform launched in 2015 and based in Austin, Texas, founded by entrepreneur team Albert Pomales, Andrew Tomasik, Mark Adams and John Constantine. KindHealth’s platform is powered by cutting-edge technology which recommends the best insurance plan for consumers’ needs and budget allowing KindHealth to better understand its customers and offer the right insurance plan. Additionally, KindHealth’s Marketplace Builder™ makes it simple for companies in any category — from leading technology brands to insurtech startups — to offer white-labeled digital insurance solutions to their customers. Visit https://www.kindhealth.co.

Photo credit: “Tortoise eating daisies” by Tambako the Jaguar is licensed under CC BY-ND 2.0.