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Riding the Waves of Insurtech

This post is part of a series sponsored by AgentSync.

The development of technology in all industries follows a similar pattern. Transformation doesn̵

7;t happen overnight. Rather, we see an evolution from infancy to maturity in how an industry uses the technology at its disposal. At the same time, the actual capabilities of technology continue to evolve so that what was “cutting edge” one day soon becomes standard, and there is room for the next innovation to take its place as the latest and greatest.

According to AgentSync co-founder and CEO Niji Sabharwal, the insurance industry is at an inflection point. Once the major players in the industry have reached a moderate baseline level of digitization (accelerated by the necessity of a more distributed, remote workforce thanks to COVID-19), the next wave of insurance technology (insurtech) may begin to take hold. We’ve seen this evolution happen more quickly in other industries – hospitality is one example – as insurance technology has so far only scratched the surface of what’s possible.

There are a few reasons why insurance is lagging behind industries like hospitality in terms of technology adoption.

These include:

  • The well-established nature of the insurance industry (after all, it has a history dating back thousands of years!).
  • The fragmented nature of the industry and how it is regulated, mostly on a state-by-state basis.
  • A lack of standardization in industry best practices: There are an almost infinite number of ways to “do things” as long as the end result is that they are done according to the rules.
  • The aging (and shrinking) population of the insurance industry’s workforce, along with skills and knowledge gaps that arise as an entire generation of industry experts retires.

But the times they change! At least from what we can see from the vantage point of a fast growing underwriting technology with equal focus on ensuring easy compliance for insurers, agencies and MGAs and create a modern, digital experience to meet the needs of the emerging insurance workforce.

We sat down with our co-founder and CEO, Niji Sabharwal to discuss the waves of insurance technology, where the industry is right now and where it might be headed.

Wave no. 1: Digitization of existing processes

“The first wave of insurtech is mostly about digitizing the processes that already exist. There are a few reasons here.

First, digital processes can build in redundancies and oversight to make it easier for new and inexperienced users to integrate into the process.

Secondly, basic efficiency gains mean being able to do the same processes with a smaller staff if necessary.

Third, a digitized insurance process, from underwriting to claims payment, can be repeated even between carriers, agencies or MGAs with less need to leverage internal legacy knowledge bases.”


There are thousands of carriers, agencies and MGAs, and there is no one comprehensive process or system for how they all do business. The insurance industry is incredibly regulated – yet notoriously inconsistent in these rules from state to state, meaning that each of these thousands of insurance organizations follows different rules and creates unique processes to achieve the same goals.

As Niji points out, the digitization of existing insurance industry processes alone has been transformative. First, adopting digital processes inherently standardizes how an organization is run. Daily tasks can go from “the way Martha has done it for 25 years but no one knows why” to a standardized and repeatable process that anyone, even a new hire, can follow and do. This becomes even more significant knowing that the median age of insurance agents is nearly 60, and the industry is facing a shortage of thousands and Gen Z talent.

“We’ve already started to see significant changes in the industry just by digitizing current processes, swapping faxed papers for signatures to emailed PDFs and click-button contracts.

If taking the existing process and putting it into a computer can have that kind of impact, just imagine what the second wave of insurance technology will look like.”


Wave #2: New use cases, transformative innovations for digital insurance applications

As the 2022 InsureTech Connect (ITC) conference emphasized, insurance technology companies are largely poised to begin moving past the first wave. Yet, as this is an emerging era, understanding its implications is entering a realm of speculation, where we project into the future.

“For a second wave of insurtech, things are starting to get really interesting. To hazard a guess, this is where the industry can see and feel the impact of artificial intelligence (AI). Some insurtech companies are already doing this, using massive amounts of data that are widely available or purchasable to train AI models and automate things like underwriting and contract recommendations.”


Insurance companies that use business intelligence as part of an algorithm can act like a large operator but with a small, efficient workforce. Again, this forecast may seem super futuristic to insurance companies that still rely on manual processes, but early adopters are not far from realizing the benefits of AI, automation and application programming interfaces (APIs, which are like a coded doorway to an app).

“The second wave of insurtech will likely involve discovering new use cases for existing technology, experimenting and realizing that what can work with 10,000 policyholders can also work with 1 million policyholders.

Developing scalable technology and tying tools together by ‘chaining’ APIs will make all these solutions more efficient and effective.”


Often the business models within a line of authority are not too far apart, at least within the same state or territory. Every life insurance company or property and casualty company operating in Ohio has the same solvency and reserve requirements. They often use the same data to sign and build new products. And, depending on the state, these companies can also be priced similarly, or, as in the case of health insurance companies in Connecticut, carriers can be held to the same profit margin ceiling. Under these traditional rules and data sets, business models necessarily look very similar.

As a result, much of business marketing – at least currently – in the insurance industry is about differentiating a company because of its brand, or its internal culture, or in the non-insurance services it offers beyond its core product. But essentially, many of the underlying capabilities of insurance remain the same. But as Niji says, the second wave of insurtech will likely begin to change this, giving companies a different advantage based on how they build their contracts and use the information available to them.

“The second wave of insurtech is likely to be a long process due to the fragmented nature of insurance. It is difficult to build consensus among so many companies regulated by so many different authorities, and building something agile and comprehensive may not be an easy suggestions .”


Still, it’s an interesting proposition to imagine the number of areas that could be affected by emerging technology. Onboarding, commissions, compliance … there are so many possibilities.

Wave No. 3: Mega Insurance?

Since insurtechs are barely entering what we might consider the second phase of innovation, throwing projections this far into the future for a third wave is really just a shot in the dark. Who knows where insurance technology will take us?

One speculation could be that once chained APIs – multiple applications, linked together and feeding information to each other in real-time – become common across companies or across industries, there could be some major mergers and acquisitions, with traditional long-term carriers vacuuming up up smaller insurtechs. It seems likely that smaller pieces of technology will come together to make some monolithic titans of industry.

Alternatively, it could be the other way around, where smaller, more aggressive companies have the tools to compete at a high level while remaining tight and nimble.

Regardless, to some extent, we believe that a rising tide lifts all boats: the insurance industry as a whole will continue to benefit from the technological innovations and digital transformations of its processes. Even as we keep an eye on “Big Data” and are wary of protecting vulnerable populations from digital disruptions that cause harm, we can be excited about how insurtechs can improve the industry both for those working in insurance and its consumers.

If you’re excited to ride these waves with us, check out how AgentSync Manage can help you turn a roadblock into an asset with our insurance license compliance system. We’re here for you whether you’re just starting to automate once-manual processes, or you’re ready to imagine the future of Wave 3 together.

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