Just like fintech start-ups are disrupting the traditional brick and mortar business models, insurance too is becoming amicable with technology. Insurtech is the buzzword in many markets, and risk management is quickly becoming a significant subject for digitisation in many financial systems. The concept has gained visible traction in the last couple of years when some of the large global insurers decided to give it a go. Billions of dollars are going into insurtech start-ups that are disrupting the global industry in a way that Airbnb, Uber, Netflix have shaken their conventional industries.
Coming to Pakistan, many argue that the technological sophistication is too far for an insurance sector that is has extremely low penetration. However, the large population, increasing internet and smartphone penetration and easy regulatory environment make a good case for insurtech in the country as it can help the industry improve coverage. Micro-insurance is a specialised segment that can particularly benefit from insurance technology as this market still lagging behind in Pakistan due to its accessibility challenge for conventional financial service providers. Plus, getting an insurance cover and the paying premiums can be logistically challenging for consumer in the remote areas.
Some activity in the sector however has caught attention lately when the Security and Exchange Commission of Pakistan (SECP) organised a workshop on insurtech a couple of months ago. The SECP has also recently approved a new life insurance product, which is equipped with insurtech features like artificial intelligence and data analytics. It can track the health performance of the policyholder along some predetermined parameters and has integrated benefits as well. It is developed by a local insurance firm in partnership with an international technology service provider.
Instead of delaying technology adoption, the sector players should ramp up adoption to increase penetration ratio, which stands below one percent of GDP. Though the name of the insurance firm that has come up with this insurtech product has not been announced, some names have been gaining prominence for interlacing of tech with insurance in the sector.
Without getting into the details of how these platforms and companies are doing, one can see the emergence of technological solution in the insurance sector in the country. Mawazna.com is a financial service aggregator and a comparison platform for financial products including insurance products. Easyinsurance. com.pk is s an entrepreneurial venture that aims to digitise access to insurance and is a guidance platform for insurance products. Then there are Karlocompare.com.pk and Smartchoice.pk that are also a comparison website for financial products including credit cards, personal loans, car loans, insurance, takaful plan and broadband. There are insurers like TPL life Insurance that is also moving up the technology ladder with technology based future plans.