“The future of insurance is happening without insurance firms”, declared a headline in The Economist in July 2019. “The industry’s plodding giants face mounting threats …”, warned the subhead, neatly summarising the massive change in the insurance industry.

The insurance industry, once the playground of a few top brand-name providers, is seeing a major upheaval. Fintech companies big and small are innovating to offer products and services that better fit into consumers’ modern lives and have single-handedly spawned an entire industry: insurtech. The traditional players, which perhaps were a bit slow to join the game, are seeing their businesses disrupted and threatened.

At its core, insurtech innovation is the breeding ground for fresh, new approaches to insurance that keep this industry relevant. Here are three examples.

1. AI-enabled detection

There is plenty of talk about artificial intelligence (AI) transforming the world, and the insurance industry is no exception. The first, most obvious application is in automating claims settlement, which used to take days or even months. One U.S.-based renter and home insurance provider has sped up its claims process to a matter of seconds, using an AI-powered claims chatbot.

By automating the process, insurers can add an extra step to guard against fraud. This is a complex problem to solve and could save insurers millions: The global insurance fraud detection market is expected to triple from US$2.5 billion in 2019 to almost US$8 billion by 2024.

How will this work? The chatbot can review a claim, verify the policy details and then pass it through a fraud-detection algorithm. Once it gets the all-clear, the bot will send instructions to the bank to pay the claim. Chatbots can free up workers’ time to focus on delivering timely customer service, instead of getting involved with answering basic queries.

2. Safer roads with driver risk profiles

Another trend on the rise globally is telematics, made possible by the advent of connected cars. Telematics devices contain a GPS system, motion sensors, SIM card and analytics software. When installed into cars, they can track speed, location, time and other driving data.

The intent here is to use almost-real-time data to create risk assessments of individual drivers and use customised insurance pricing models to benefit safer drivers. What’s more, this means that telematics boxes can help detect fraud.

Telematics solutions can become incredibly granular. For instance, one insurance provider creates profiles of drivers and the way they drive, based on four factors: hard acceleration, which reduces reaction time and fuel efficiency; cornering, which can reveal distracted or drowsy driving; harsh braking, which can show the driver is following the car in front too closely; and pace, which is the overall consistency of speed while driving.

3. APIs for a better service

It is clear that consumers today demand a flexible, customised insurance experience. This certainly makes business sense, too – for instance, insurer NTUC Income increased the click-through rate of their ads by 92 percent when they customised digital experiences for each customer.

This is why insurers are now using insurance APIs. Put simply, APIs allow providers to offer insurance as a service, sharing their information and services with third parties. For instance, an insurer with its own API can partner with online travel agencies or airlines to cross-sell insurance services directly on partner websites. This allows consumers to buy insurance products in ways that suit their lifestyles best.

Tech is a great equaliser, allowing small but innovative fintech companies to compete in more markets, create new business models and give established players a run for their money. And all three trends point towards one clear objective: a seamless, more customised experience for a more empowered consumer.