Insurtech did not appear overnight. When it comes to collecting and analyzing data to assess risks and calculate exposures and premium payments, insurance companies are the consummate experts. Insurtech is the natural result in two recent developments in the industry.

The first development involves the increased availability of data. It is said that the volume of available data in recent years has doubled every two or three years. Perhaps even more importantly, the available data now has various different sources. While in the past insurance companies had to rely mostly on the answers they received in response to specific questionnaires and on statistical data, the technical developments in recent years have allowed for much broader sources of data. Social media and other third parties are now providing data independent of customers. Wikipedia and other open-source data also allow for a much more efficient gathering of information. Finally, customers are providing data through their own devices, be it at home, in the car, by mobile phone, etc.

The second development is that analyzing this data has become much more efficient. Big Data analytics (i.e., collecting, storing and analyzing Big Data volumes from internal and external sources) is key.

The volume of data as such is not decisive, rather the ability to analyze and draw conclusions. New technologies, such as the use of algorithms and artificial intelligence, provide efficient tools for this.

In particular, the second mentioned aspect creates disruption. Incumbent insurers are confronted with the fact that either they need to invest in acquiring the respective technical capabilities or they need to liaise with third-party providers. In addition, they are faced with new competition by new companies targeting specific markets. While many of the new providers are focusing on certain aspects of the insurance value chain, there are also new full-fledged insurance companies.

Baker McKenzie has produced a paper discussing the above developments, including data privacy/GDPR issues, the legal framework of insurtech and embracing new technologies. In the paper, our experts focus on these issues within the following jurisdictions, wherever they are relevant:

  • France
  • Germany
  • Hong Kong
  • Italy
  • Singapore
  • Switzerland
  • United Kingdom
  • United States
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