The potential expansion of insurtech start-ups in the Australian market could help address the country’s growing underinsurance problem, according to KPMG’s global head of fintech in insurance, Martin Blake.
Mr Blake told Risk Adviser there is an estimated $1 billion in underinsurance in the Australian market and insurtech could help insurers adjust to customers’ changing circumstances in identifying appropriate levels of cover.
“Using data analytics provides businesses with an understanding of behavioural trends of their customers which can enable them to engage in moments of truth,” he said.
Mr Blake cited the example of US insurtech company Trov entering the Australian market to help Millennials who are underinsured or not insured attain cover for certain possessions such as cars.
“Insurtech is targeting a high number of uninsured Millennials, enabling them to insure individual items for a short period of time, because there are a whole bunch of Millennials who are underinsured or not insured,” he said.
“The interesting thing is that the company becomes founded in the US, but has their first rollout in Australia because of their partnership with Suncorp.”
Mr Blake said the Australian market is an attractive option for insurtech start-ups.
“Because of the high levels of digital engagement, it does provide an attractive market for insurers to actually come to Australia and pilot their ideas and, obviously being a testing ground for financial activities to be rolled out, it means that our local insurance industry is going to innovate faster than if these technologies were piloted elsewhere.”