How Insurtech Is Revolutionizing General Aviation Insurance?
Insurance is an absolute must in the aviation industry. Whether a company flies planes, supplies aviation fuel, handles cargo, or provides tertiary services to airports and terminals, it can’t do business without adequate insurance. Unfortunately, aviation insurance has not kept up with the aviation industry’s drive toward digital transformation. Enter the emerging insurtech industry.
Insurtech is to aviation insurance what fintech is to the financial services industry. Granted, insurance is considered a financial service by most experts. Yet insurance does have its peculiarities, peculiarities that set it apart in terms of his technology needs.
Companies operating in the fledgling insurtech space are coming up with all sorts of products and solutions designed to leverage what the digital age has to offer to improve enterprise-level insurance products. We’re seeing that in the aviation industry with greater frequency. One example is aviation supply chain insurance.
Not a New Insurance Product
Aviation supply chain insurance is by no means a new product. It has been around for decades. However, procuring insurance has long been a challenge for shippers. Jumping through hoops to get adequate coverage has traditionally been difficult because the aviation supply chain is so complicated.
Aviation insurance itself has been hindered by a lack of digital adoption. But with the digital transformation now going in full force, the insurtech industry is aiming to change that. Some of the best-known names in the industry now make it possible for shippers to procure insurance in minutes. That is a huge upgrade.
A Basic Definition
Insurtech is not difficult to understand. It is defined as a collection of technologies aggregated to improve and automate the insurance industry. Examples of such technologies include:
- Artificial intelligence (AI)
- Big data analytics
- Blockchain technologies
- The Internet of Things (IoT)
It’s hard to imagine that the insurance industry has been so slow to adopt such technologies. But that is exactly the case. Where some other industries have been fully on board with the digital transformation for years, the insurance industry is still working to catch up. Their lack of digital capabilities is what has historically made aviation insurance so challenging from a shipper’s perspective.
Insurtech’s Key Characteristics
To understand insurtech’s impact on general aviation insurance, it might help to know its key characteristics. Those characteristics define what insurtech can do for the insurance industry in general, and aviation insurance in particular.
1. Digitalization
At the top of the list is digitalization. Insurtech companies leverage digital channels and similar resources to offer personalized products. Digitalization also allows them to streamline underwriting processes and enhance the customer experience. This is exactly what the aviation industry needs, given the fast pace at which aviation companies operate.
It must be pointed out that digitalization is not the same thing as digitization. The latter refers to converting from paper to digital documents. The former is all about transforming legacy processes, software, and equipment to more modern, digitally based alternatives.
2. Innovation
By its very nature, insurtech faces on innovation. The insurtech industry purposely disrupts traditional insurance paradigms by introducing new technologies and processes. As insurance providers embrace the technologies and processes, they are better equipped to offer the kinds of products their customers want.
A prime example is peer-to-peer insurance. Other examples include microinsurance and use-based coverage. Customized insurance products are very much in demand in the aviation industry. Due to the incredible variation in aviation practices and business models, many companies cannot get by with off-the-shelf insurance. They need custom products facilitated by modern technology and processes.
3. Efficiency
The hallmark of successful insurtech adoption is efficiency. Everything in the insurance industry is much more efficient when operations are digital. Purchasing insurance is faster and easier, underwriting is streamlined, claims can be submitted in minutes, and policies can be modified with the click of a mouse.
From the insurance carrier’s perspective, efficiency manifests itself through both automation and AI. Insurtech reduces the need for manual labor while simultaneously improving accuracy and regulatory compliance. The result is a more efficient operation more capable of serving the aviation industry.
4. Accessibility
Access to insurance products and information is hindered when carriers do not embrace the digital transformation. While the rest of the world operates online, a legacy insurance company is still trying to do business with paper documents and telephones. This just won’t do for aviation companies.
On the other hand, insurance carriers willing to embrace insurtech throw the door wide open in terms of accessibility. Customers can still contact insurance representatives by phone should they so desire. But they can also make contact by email, online chat, private messaging, and any other digital channels the parties agree on.
Why stop at communication? Insurtech gives aviation companies online access to all their insurance data in real time. They can see and modify their policies at a moment’s notice. They can review policy changes, plan for future renewals, and stay abreast of new insurance products.
A Difference Like Night and Day
The difference between legacy operations and insurtech is like the difference between night and day. An insurance carrier is transformed from a dinosaur into a lean, mean, insurance-providing machine. That’s exactly what the aviation industry needs.
Aviation companies deal with liabilities not known in any other industry. In addition, they are subject to multiple regulatory schemes depending on where they operate. There is a lot to keep track of from an insurance standpoint. So working with an insurance carrier not fast or flexible enough to keep up with the speed of modern business just drags an aviation company down.
Insurtech Is Changing the Game
As the digital transformation continues all around us, insurtech is changing the game for the entire insurance industry. Carriers, brokers, and customers alike are discovering how much better it is to do business digitally. The difference is remarkable.
To the aviation industry, insurtech represents a way to get around the historically clunky aviation insurance model. Handling insurance matters is quickly becoming a routine task rather than an enterprise requiring a considerable effort. There is nothing bad about that.
For Best of The Article Click Below!!!
Share this article:
