Running head: DRAFT RESEARCH PROPOSAL

Fintech innovations and their impact on the Insurance industry

Case Analysis – DAM INSURANCE

Suni Neelam

VIC University

Author note:

This paper was written for Internship Research Project (MGT589) taught by Leen
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Introduction

Technology that helps in advancing the finance industry is known as Financial

Technology (Fintech). According to Gupta & Mandy (2019), digitalization across the globe

resulted in consumers expecting speed and sophisticated financial services, which resulted in

demand for Fintech innovations because they are revolutionizing the entire finance industry. The

insurance industry is a subpart of the finance industry. This research project focuses on ERP

tools built on Oracle, Blockchain and Artificial intelligence in the insurance industry. In recent

times, the insurance industry has experienced growing technology-driven InsurTech startup

companies where the prime focus is to improve customer experience by adding technology

innovations in their day to day lives, and these companies are focused on delivering more

customer-centric insurance products and services that add value in many ways to users.

According to InsurTech global outlook (2020), as of 2019, nearly 1400+ startup fintech

companies are operating worldwide with a $6.3 B funding.

This paper's key takeaways would be exploring the impact of Fin-Tech tools in the

insurance industry and how they are helping insurance companies to continue their business even

in crises. Insurtech innovations are rapidly changing the traditional ways how insurance

companies operate, and it is evident with companies like DAM insurance, which has been

evolved in the last thirty-seven years. This study is supported by personal experience while

working in DAM Insurance, in-person, or telephone interviews with DAM employees, and

secondary sources available from local news and scholarly articles on the websites.

Proposal

This paper is built on an explanatory sequential mixed-methods study to explore the

driving factors of FinTech innovations. The research project is to understand the insurance
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industry, explore the various fintech innovations in the insurance industry, and analyze the pro

and cons in regular and crisis times. Furthermore, to knowhow working on ERP tools. Also,

adding my prior experience and class learnings to enhance the existing processes. Finally,

quantitative and qualitative data about the insurance industry would be explored to get holistic

information on the significance and challenges that insurance companies in adapting to

technology innovations.

Project Title

Exploring the impact of Fin-Tech innovations on the Insurance industry: A Case Study of

DAM Insurance

Introduction – Internship role

I have been employed with DAM insurance as an Accountant. I am responsible for

maintaining and recording financial transactions by establishing accounts, posting transactions,

and ensure legal requirements compliance by working on different ERP systems. I also provide

financial information to management by researching and analyzing accounting data from various

financial reports.

DAM Insurance was founded in 1983, and they are operating locally within Victoria from

three locations. DAM Insurance is specialized in commercial and home insurance products.

DAM Insurance deals with well-established insurance companies and provides the best

competitive prices to their clients (DAM Insurance, 2020).

Problem Statement

The purpose of this explanatory sequential mixed-method study is to assess the overall

impact of Fintech innovations on the Insurance industry in general and in crises. The research

project primarily focuses on how DAM is taking advantage of fintech innovations to continue
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and strengthen its business during crises by giving benefits to its customers. The qualitative

approach will be used to collect information from DAM employees to understand the impact of

technology in crises and how new Fintech additions are improving the business. Furthermore,

knowing about DAM employees' opinions towards fintech innovations, how technology is

attracting the customers, and how technology is helping insurance organizations follow the

COVID-19 protocols to continue their business in pandemic times. The quantitative approach is

used for data collection from DAM employees by a survey to understand how technology helps

them continue and increase the business even in a crisis. Both the qualitative and quantitative

approaches will be applied to explore the impact of fintech innovation on the insurance industry.

Research Question

Main Question: How can Fin-Tech innovations help Insurance companies to sustain and grow

their businesses in Canada during pandemic situations?

Sub-Question 1: What are the driving factors that incline insurance companies and consumers

towards fintech innovations?

Sub-Question 2: In what ways does technology enhance customer satisfaction in Canada's

insurance businesses at pandemic times like COVID-19?

Academic Discipline

The primary academic disciplines that will be examined in this internship research project

are, knowing more about ERP tools used by DAM insurance to help their business development.

Furthermore, formulating a strategy that will help DAM Insurance enhance its customers'

satisfaction with technology's practical use. Also, analyzing DAM employees' feedback about

contactless online insurance services and how customers are responding in COVID-19 times.
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The sub-topics will be further explored are, strategic decision-making by DAM in adding new

fintech tools that help them continue and enhance DAM business even in pandemic times.

Annotated Bibliography

Chen, M. A., Yang, B., & Wu, Q. (2019). How valuable is fintech innovation? Review of

Financial Studies, 32(5), 2062–2106. https://doi.org/10.1093/rfs/hhy130

Chen, Yang and Q (2019) stated that large-scale Fin-Tech innovations took place between

2003 to 2017, and these innovations are patent filled. Furthermore, they claimed that they

effectively used machine learning to segregate the underlying technologies and classified them

into related domains in the finance industry. The authors also stated that most of the valued

innovations are built on blockchain technology and are generating substantial value to

innovators. The authors also highlighted that the internet of things (IoT), Robo-advising, and

blockchain are considered the most valued innovation in the finance industry. Also, the authors

highlighted the fintech innovations that are also helping finance organizations to mitigate the

negative effect of disruptive technologies that are creating issues to finance organizations. The

well-established finance companies are investing heavily in fin-tech innovations.

Cong, L. W., & He, Z. (2019). Blockchain disruption and smart contracts. Review of Financial

Studies, 32(5), 1754–1797. https://doi.org/10.1093/rfs/hhz007

According to Cong & He (2019), Blockchain is considered a game-changing technology

in recent times. The Blockchain gives decentralized consensus and potentially enlarges the

contracting space through smart contracts. The authors also state that smart contracts have made

many things simple for insurance organizations to deal with their vendors and customers. The

Blockchain innovation also alters the information environment with its decentralized consensus
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resulting in distributing information. The authors also claimed that they analyzed how

decentralization provides quality information and the essential features in Blockchain technology

help in re-moulding the landscape of the finance organization's competition.

Cong & He (2019) acknowledged that Smart contracts help in mitigating informational

asymmetry. The authors also stated that the smart contracts built on Blockchain technology help

improve well-being and consumer overage through enhanced entry and competition. However,

distributing information during consensus helps create an information system that may

encourage more significant collusion. Furthermore, the authors argued that blockchain

technology could create a sustained market equilibrium, which creates a wide range of economic

outcomes. Also, the authors discussed the negative implication of the technology on the finance

and insurance industry and briefed out the antitrust policies that target the blockchain

applications.

Balasubramanian, R., Libarikian, A., & McElhaney, D. (2018). Insurance 2030—The impact of

AI on the future of insurance. McKinsey & Company. Retrieved from

https://www.mckinsey.com/industries/financial-services/our-insights/insurance-2030-the-

impact-of-ai-on-the-future-of-insurance#

According to Balasubramanian, Libarikian & McElhaney (2018), the evolving InsurTech

startups in the insurance ecosystem primarily focus on the business opportunities for their

innovations. The initial focus is more on the banking sectors, which created many innovations

from various companies, leading to heavy competition. New startup companies primarily focus

on the insurance industry, where they find more scope for business opportunities. In parallel, the

upcoming entrepreneurs emerging in the insurance industry are digging into the traditional
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insurance business's weaknesses. Furthermore, looking towards adding technologies like

artificial intelligence, blockchain and big data to their systems to attract new customers will be

efficient for the sharing economy.

Chatzara, V. (2020). FinTech, InsurTech, and the Regulators. Research Gates. 25(1). 3-25.

https://doi.org/10.1007/978-3-030-27386-6_1

Chatzara (2020) claimed that the finance and insurance industry regulators need to be

agile with the evolving technology-enabled business models. The author stated that recent

innovations are questioning the existing regulatory authorities and creating more scope for fraud

with the old policies. Furthermore, the authors argued that the digitalization environment made it

complicated for the regulatory authorities to exercise their control and power. Moreover, on the

positive side, the predominantly used DLT applications in the insurance industry being changed

to meet the existing and new regulations, standards that are in practice, and regulations are also

focusing on building new legal and liability frameworks.

Chatzara (2020) also claimed that strong regulation is being built to protect the

consumer's data in all the stages such as collecting, processing, correcting, and sharing. Also, to

safeguard data privacy policies from data breaches, cyber-crimes and unintended use, a robust

information system is being implemented across the organizations.

Cappiello, A. (2018). Technology and the Insurance Industry: Re-Configuring the Competitive

Landscape. Cham, Switzerland: Palgrave Pivot. Retrieved from https://link-springer-

com.ezproxy.royalroads.ca/book/10.1007%2F978-3-319-74712-5
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Cappiello (2018) detailed how digitalization is changing the entire financial and insurance

system. Besides, technology is continuously affecting all points along the insurance value chain

and subsequently re-shaping the competitive landscape. Furthermore, the author highlighted the

data collection process with the artificial intelligence that helping insurance companies to collect

and analyze the data at a granular level. Furthermore, the significant data innovations with the

smart analysis techniques predictive modelling and connecting telematics devices help insurers

set their premium and build their products considering the actual risk profiles rather than general

standards. The regulatory authorities are also considering the product delivery process that is

being affected by the technology addition to the business.

Methodology

This research will be developed with a mixed-method exploratory sequential design

approach with a pragmatic worldview to understand better the pros and cons of technology in the

insurance industry in regular and pandemic times. The grounded theory, combined with the

output of qualitative and quantitative approaches, gives the best insight through general findings,

and helps build a comprehensive viewpoint (Creswell & Creswell, 2018).

Firstly, the quantitative investigation helps identify the technology trend in the insurance

industry and know the consumers' preferences towards fintech innovations. To get the best

output, a survey from the underwriters working at DAM insurance will help us know about

consumers' preferences as they have experience in dealing with various customers. The online

survey for underwriters should include what age group consumers are inclined towards new

technology and on a scale one out of ten consumers how many shows interest in adapting to new

technology in the market.

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Secondly, qualitative approach of conducting telephone or in-person interviews with

DAM employees. Qualitative data is necessary to identify the critical factors that making

customers look towards technology. Moreover, in what ways technology is helping them to

continue their business even in crisis times. This interview also helps identify how DAM is

maintaining a long-term relationship with its consumers with the help of fintech tools.

Anticipated Benefits

The research helps to identify the pros and cons of technology role in the insurance

sector. It also given an idea about the growing cost friendly technologies in the insurance

industry and in what way they are helping in improving their business and to sustain the

businesses in the crisis times. Moreover, this study would help identify the necessity for adapting

to new technology by the business owners to ensure business sustainability during uncertain

times. Also, with the mixed method approach getting the data by quantitative and qualitative

approach is reliable and the study is assured based on the information gathered from respective

DAM owners and employees.

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References

Balasubramanian, R., Libarikian, A., & McElhaney, D. (2018). Insurance 2030—The impact of

AI on the future of insurance. McKinsey & Company. Retrieved from

https://www.mckinsey.com/industries/financial-services/our-insights/insurance-2030-the-

impact-of-ai-on-the-future-of-insurance#

Cappiello, A. (2018). Technology and the Insurance Industry: Re-Configuring the Competitive

Landscape. Cham, Switzerland: Palgrave Pivot. Retrieved from https://link-springer-

com.ezproxy.royalroads.ca/book/10.1007%2F978-3-319-74712-5

Chatzara, V. (2020). FinTech, InsurTech, and the Regulators. Research Gates. 25(1). 3-25.

https://doi.org/10.1007/978-3-030-27386-6_1

Chen, M. A., Yang, B., & Wu, Q. (2019). How valuable is fintech innovation? Review of

Financial Studies, 32(5), 2062–2106. https://doi.org/10.1093/rfs/hhy130

Cong, L. W., & He, Z. (2019). Blockchain disruption and smart contracts. Review of Financial

Studies, 32(5), 1754–1797. https://doi.org/10.1093/rfs/hhz007

Creswell, J. W. & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed

methods approaches (5th ed.). Thousand Oaks, CA: SAGE Publications, Inc.

Gupta, P&Mandy, T.(2019). Fintech: The New DNA of Financial Services. Boston: Walter de

Gruyter. Retrieved from

https://ebookcentral-proquest-com.ezproxy.royalroads.ca/lib/royalroads-ebooks/

reader.action?docID=5691957

DAM Insurance. (2020). Insurance is our only business. Retrieved from

https://www.DAMinsurance.com/
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InsurTech global outlook. (2020). Insurtechs, keys for understanding how they are challenging

and complementing the insurance sector. Retrieved from

https://insurtechnttdata.everis.com/dist/resources/vlarrosa/insurtech/Insurtech-Global-

Outlook_Report.pdf