How InsurTech aims to bring about sustainability in the insurance industry

InsurTech, or insurance technology, is the use of technology in the insurance industry with the aim to reduce inefficiencies and streamline processes, through innovative transformation. Simultaneously, insurtech firms and initiatives also aim to introduce sustainability into the business, these are some such ways:

  • Using AI and data analytics to track and monitor the insurance industry’s emissions - through this they can identify their most polluting and environmentally harmful aspects and accordingly take measures to reduce these emissions

  • Data and AI is also used as a more accurate alternative to current risk assessment measures - the more accurate data can be used for more accurate, less bloated premiums, which will also lower associated environmental costs

  • Focus on more sustainable industries, as well as support for sustainable initiatives via lower insurance premiums - by offering reduced insurance costs to various environmental initiatives or environmentally friendly companies, this will incentivise them and this could also have positive effects on people buying from these companies

  • Cloud migration - by reducing a dependency on dedicated data centres and migrating to cloud services, there is a smaller subsequent carbon footprint

  • Greater transparency - sustainable insurtech companies have more of a motivation to release data, particularly that relating to ESG, which in turn promotes more sustainable and environmentally friendly practices

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It’s fascinating to see how insurtech is not only revolutionizing the insurance industry but also incorporating sustainability measures. do you think traditional insurance companies will adopt these sustainable practices, or do you see insurtech leading the way in environmental responsibility?

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It is increasingly in more and more companies’ interests to adhere and adapt to ESG measures, so it is possible that insurance companies will look themselves to adopt more sustainable measures. Although, at the same time it is very possible that insurtech could be prompting the insurance industry as a whole to take more climate action and sustainability measures.

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