Investments in financial technology (fintech) nearly tripled in the U.S. from 2013 to 2014, according to a new report by Accenture and the Partnership Fund for New York City. The value of U.S. fintech deals jumped nearly 200 percent.
Life insurers, acutely aware of the threat of digital disruption, are getting in on the action.
More than four in 10 insurers (43 percent) are either planning to buy, or already bought, a fintech startup.1 For example, Northwestern Mutual recently bought New York-based fintech startup LearnVest, a provider of online financial planning and client experience technology.2 John Hancock bought San Francisco-based fintech startup Guide Financial, a software company that uses artificial intelligence for financial planning.3 The startups will likely operate independently, then the acquiring companies will be able to use the new technologies to transform how they help their customers achieve financial security.
Don Desiderato, Senior Vice President and Chief Information Officer of Insurance and Agency Technology at New York Life Insurance Company, states in the new report, “Fintech offers invaluable ways to solve legacy problems and attack some of our core challenges. It will ultimately help us design our future.”
It’s already happening. By monitoring health habits using wearable devices, insurers can now both tailor products and policies for the individual and help customers live healthier lives by offering discounts on health club memberships or tips on healthy living. Through new, automated investing advisory services or “robo-advisors,” insurers can give customers a new way to manage their wealth and invest their money using algorithms instead of human financial advisors. These are just a couple of examples of how fintech and other technology developments are poised to reinvent life insurance.
Read the full report, Fintech New York: Partnerships, Platforms and Open Innovation.
My next post will look more closely at robo-advisory services, a large part of the wealth management fintech investment space.