RDT Blog

How technology is driving new business models for motor insurers


The combined effect of big data, artificial intelligence and machine learning has potentially huge implications for the future of motor insurance. Hardly a week goes by without research or an industry spokesperson highlighting the demise of traditional practices and the rise of insurtech.

For example Insurance Times recently quoted AXA’s UK technical director David Williams’ suggestion that as much as 80 per cent of today’s motor insurance market will have disappeared by 2040. That’s not a death knell for motor insurers. Instead the market is likely to change, with insurance being defined and transacted differently. Insurers have time to react, and there is huge potential for technology to benefit the motor market.

The advent of driverless cars, continued insurtech innovation, the impact of the sharing economy, the growth of consumer power and the expectations of millennials – these are some of the factors that will increasingly shape insurance products and the relationship between insurer and insured.

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How do you handle all the data enrichment for motor insurance?


Profitable underwriting depends on reliable and relevant data. Today, thanks to insurtech, insurers have access to more data than ever before, which helps everyone in the insurance chain. 

Data enrichment means that insurers need some way to store data, not only in huge volumes, but also in a secure format. The amount of data that insurers could gather about customers and their driving behaviour will grow with time as data-gathering technology use increases. Huge amounts of data are already being taken from telematics, GPS and dashcam devices. It is believed that by 2020 about 1.7mb of new information will be created every second for every human on the planet, meaning that data storage requirements are going to grow exponentially too.

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Why mobile technology is a double plus for insurers


The increasing popularity and value of mobile devices, particularly smartphones, has created a lucrative growth area for so-called gadget insurance. And at the same time, there’s an emerging marketplace for cover that’s arranged through phone apps. The result is a virtuous circle where insurers can connect with their customers through mobile technology and also insure the gadgets that provide that connection. 

Market research consultancy Finaccord estimated that the global mobile phone insurance market was worth about US$13.3billion in 2015, and would reach close to US$17.6billion by 2019. That’s small in comparison to motor and home insurance but it’s already larger than the travel insurance market, and Finaccord says it’s likely to increase at an annual rate well ahead of motor and home insurance.

So this makes a significant opportunity in a market that barely existed a decade ago, and a double plus for insurers who are already playing to the needs of smartphone users and particularly the millennial on-demand generation.

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RDT are attending TINtech in London


RDT has been at the leading edge of general insurance software for over 25 years.  From the outset we've been pushing boundaries, producing disruptive solutions and investing in technology and people.  We are fiercely proud of our achievements but we're never satisfied, and constantly seek opportunities to accelerate our technology.  Insurtech is transforming the industry and to stay competitive insurers must adopt new techniques and practices; innovation has become a strategically essential target.  Collaboration is one of our guiding principles and we work closely with our clients to define tomorrow's challenges and tackle them before they become problems.

We are delighted to announce that we are attending TINtech, the Insurance Network's technology conference, on 15th June in London.

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