Artificial intelligence (AI) may shake up even the most innovative insurtech ventures in the near future. That’s the prediction of
Many conflate insurtech and fintech into the same space, and there is a great deal of overlap between the two, Margaris stated, adding AI as an additional category to the mix. “Fintech, insurtech and AI all work together,” he said. “I come from the fintech industry I love, but I believe that technology should be mixed, like cooking ingredients when you cook. Sometimes you use more pepper, sometimes more salt and the great restaurant chefs mix things in a way that can create magic.”
AI – which Margaris prefers to call “the influence of machine learning or deep learning” – is starting to be felt across the insurtech, fintech and associated industries, he said. The impact on innovation will be profound. “AI, through machine learning and deep learning, will eventually become the entrepreneur of the future—and we humans need to compete against it.”
Still, the insurtech ventures that will succeed are those that embrace AI to deliver customer value in specific ways – not those that simply specialize in AI, he continued. “If a startup’s claim to fame is only that they differentiate themselves from the competition by using cutting-edge AI and machine learning algorithms, then that startup will not cut it anymore in the future.” Why? Because AI will become so ubiquitous that it will not offer distinct competitive advantage, he said. “As a company, there is no way around investing in AI to stay competitive, but it’s only one part of the success puzzle. A company still needs to have a compelling business case that attracts clients, but AI, machine learning and deep learning for sure will be part of the equation to compete successfully in their space.”
Margaris has reiterated what has been the most important technology lesson learned over the past four decades, and continues to be the lesson going forward with each new technology wave. A stalled organization with calcified processes will not change overnight just because expensive new technology is dropped on it. That is, success comes from serving markets with superior service, value and innovation. This requires inspired, forward-thinking management that is open to change and idea-sharing. The insurtech companies that are enjoying success are not where they are because they brought shiny new technology to the industry – they saw holes or unrecognized opportunities in the insurance delivery process.
