With Disruption at Unprecedented Levels, How is InsurTech Helping?

June 23, 2020

InsurTech companies are really getting their claws into the insurance industry. New products are coming to market, processes are being overhauled and end customers are benefiting from the positive disruption. From Zego’s flexible policies to By Miles pay-per-mile car insurance, new solutions are rewriting the rules of insurance to better serve customers.

But are these new technologies helping or hindering insurance premium tax (IPT) compliance or making it more complex? Let’s take a look at some emerging trends and their effect on the insurance industry.

Automation and artificial intelligence

Some of the greatest disruptors are artificial intelligence, machine learning and the rise of automation. Though still in the early days of implementation, these technologies are gaining ground and being used by InsurTech startups to source the best policies, generate contracts and accelerate the filing process.

New insurers are adopting these capabilities too, as they have the advantage of starting up with a fresh order book and no legacy technology.

For larger cross-border insurers or those with sprawling IT estates, it’s not as straightforward, however there are still plenty of business processes that can be improved with targeted AI, data science and automated technologies.

Flexible insurance

Short-term, pay-as-you-go and stop-and-start flexible insurance have boomed in recent years with everything from business insurance for freelancers to pay-per-mile car insurance offering customers more tailored, cost-effective policies.

Consumers and businesses are now accustomed to more adaptable services. Customers have come to expect a tailored approach, one where they can chop and change their policy in line with their needs – nobody wants to pay for services they’re not using.

Whilst these offerings provide many benefits to customers, they can cause headaches for insurers if not managed correctly.

IPT is not as agile as writing new insurance policies – often IPT filing occurs monthly or quarterly and there is potential for errors if policies are not filed and managed accurately, as well as the risk of over or under declaring premium tax liabilities. And errors here can be costly, either by eroding profit margins or making premiums uncompetitive at quotation.

IPT still needs to be correctly applied

This new wave of InsurTech has certainly reinvigorated the market and provided additional low-cost options to consumers. And IPT still needs to be applied as for any other non-life insurance policy.

For shorter term products built on chatbots, automated brokerage and data science, insurers should bear in mind that tax processing varies for each policy with some due early on inception and others on maturity of the policy. With many of these policies being processed in bulk, insurers need to understand how IPT is calculated for each individual policy and how it should be applied.

Understanding and planning is key for insurers to take advantage of the wealth of new InsurTech available. Get in touch with our team if you’d like to discuss how our IPT solutions help tax filing and processing.

Take Action

Keep up to date with the latest developments by subscribing to our blogs and following us on LinkedIn and Twitter. We also host regular webinars with our in-house specialists who are on hand to help.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.



Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates.
Share This Post

North America ShipCompliant
May 25, 2023
Out-of-State Breweries Gain Self Distribution, DtC Rights in Oregon

Under a settlement agreement, breweries located outside of Oregon now have more options for selling into the Beaver State, including direct-to-consumer (DtC) shipping and self-distribution to retailers. The settlement arose out of a lawsuit filed by a group of Washington breweries last year challenging Oregon laws that limited beer self-distribution to in-state breweries and DtC […]

EMEA VAT & Fiscal Reporting
May 24, 2023
VAT and Art: What you need to know

Significant inflation increases have impacted most of the world’s economies, with the UK still above 10% in 2023. This increase means a reduction in the purchasing power of consumers. Together with increases in the cost of raw materials, this has created uncertainty regarding growth of entire industrial departments and reduced profit margins for companies. The […]

North America ShipCompliant
May 23, 2023
Top 5 Myths Surrounding Retailer Direct-to-Consumer Wine Shipping

By Tom Wark, Executive Director, National Association of Wine Retailers Politics breed myths. This has always been the case as politics is, at its most fundamental, a form of storytelling. So it should be no surprise that myths have arisen as various elements of the wine industry have fought against consumers and specialty wine retailer seeking […]

May 23, 2023
IPT: Location of Risk and Territoriality

Much of the discussion on the Location of Risk triggering a country’s entitlement to levy insurance premium tax (IPT) and parafiscal charges focuses on the rules for different types of insurance. European Union (EU) Directive 2009/138/EC (Solvency II) set out these rules. However, a related topic of growing importance in this area concerns territoriality, i.e. […]

Asia Pacific E-Invoicing Compliance
May 23, 2023
Japan: New e-Invoice Retention Requirements

Japan’s new e-invoice retention requirements are part of the country’s latest Electronic Record Retention Law (ERRL) reform. Along with measures such as the Qualified Invoice System (QIS) and the possibility to issue and send invoices electronically via PEPPOL, Japan is implementing different indirect tax control measures, seeking to reduce tax evasion and promote digital transformation. […]