How innovation is transforming InsurTech, LawTech and PropTech

DAS UK Group is partnering with Instech London to host ‘The Confluence of InsurTech, LawTech and PropTech’ event at the Steel Yard in London at 6pm on Monday 24 September. Our Innovation Manager – Matthew Vamplew – looks at how innovation is transforming these sectors…

The legal expenses insurance (LEI) landscape is at a point of innovation confluence, changing in a way that is unique from traditional insurance.

Yet as an industry we do not operate in a vacuum, and the lines dividing ourselves and other industries are blurring thanks to new technological innovation and the drive for greater data collection and sharing.

In this post, I will look at three interconnecting industries – insurance, law and property – and how their respective industry specific technology innovations – insurtech, lawtech and proptech – are driving the interconnectedness between them.

A look at the investment figures and market sentiment for insurtech, lawtech and proptech start-ups shows a growing positive trend. In the last year alone, £257 million was invested in UK-based insurtechs, a huge increase from just £13.4 million invested the year before.

Lawtech, whilst in the shadow of insurtech for investment, is growing substantially year on year with investment reaching £16m in the 18 months to June 2017.

Similar patterns of investment growth are showing in the proptech industry, while a survey by the Royal Institution of Charted Surveyors and Trident Building Consultancy found that 92% of residential and commercial property owners viewed proptech as an opportunity for disruption in their industry.

At DAS UK, we work at the intersection of insurance and law, with a further window into the property world. This provides us with insight into a number areas of innovation confluence, a few of which I am keen to share…

The Smart Home - Blending Insurtech and Proptech

In the UK, 25% of home owners own a smart home device, with 66% of surveyed people agreeing that smart homes could provide them with some sort of benefit. For customers, the drive for this technological adoption is a seamless in-home experience and peace of mind, through smart thermostats for hot water when you want it (and importantly saving money on times when you don’t), and smart locks for real time monitoring of home security.

Because of this, leading insurance firms such as Aviva and RSA are actively engaging in the creation of smart home insurance policies.

The premise for this is around real time data sharing from devices, to enable the insurance company to utilise this data as a proxy for occupancy or home security and thus reflect this insight in the home insurance premium price.

Moreover, a device such as LeakBot, with the ability to shut off water pipes when it detects leaks and trigger home emergency insurance coverage to fix the issue at the same time, is a great example of blending proptech and insurtech capabilities for customer benefit.

Insurtech and Lawtech – Two Sides of the Same Coin?

An insurance policy is a contract that needs to be written and fulfilled clearly and accurately. If you look at the day job of many lawyers, they spend their time writing contracts and making sure they’re followed. Following this logic, there is a huge overlap between technological applications that can be of benefit for both industries.

One such application is the combination of optical character recognition (the process of digitally extracting text from physical documentations) and artificial intelligence, computer software able to understand and make decisions relating to that data in a similar way to a human.

Both Mckinsey Consulting and the Law Society claim AI and process automation are two key driving trends for both insurtech and lawtech respectively, with insurance and law firms actively engaging with, and piloting, initiatives to improve claims management processes and the prospects of success in legal cases.

One and the Same?

What’s interesting from the above points is just how interconnected these three sectors really are - and that’s just the start. In an ever-connected digital world, more and more industries will be working together to create an ecosystem of data sharing and co-correlated products and propositions to service the constantly connected customer.

And finally, if you are a developing innovative technology for any of these sectors, ask yourself the following key questions:

1) What industries have similar customer, process or proposition challenges to you? What have they done to address these?

An obvious starting point, this question enables you to take a step back and take stock of what your related industries are doing that face similar pain points to you – this analysis often reveals some interesting case studies.

2) What other industries is your business linked to? What technology is being developed in those industries?

Building on the above question, here you are seeking to identify any new technological solutions that may have application in your industry. Just because it hasn’t been done before, doesn’t mean it can’t be!

3) What data could add value to your current processes and propositions? Who else might be collecting or producing that data? Can any of these data sources be used as proxy to make assumptions and gain insights?

These related questions get to the tangible heart of the matter – understanding that data is the key to cross industry collaboration and new technology applications for your sector – so think about what synergies can be achieved through combing with non-traditional data sources.