To grow and be competitive, insurers are leveraging and integrating insurtech solutions.
Investor interest in insurtech is exploding and poised for more growth. Between 2014 and 2016, the amount invested in insurtech by venture capital (VC) players rose from US$404 million to well over US$1 billion.
Having recognised the value and customisation they receive from innovations in banking and other sectors, consumers now expect the same of their insurance providers. The response – insurtech – is causing dissolution of the insurance value chain by tech startups developing niche, tailored offerings.
But technology also lets traditional insurers open up new channels, speed up claims processes, and use data analytics to tailor products. By working with, rather than against, insurtech companies, the big insurance players can respond to competitive threats.
Each traditional insurance company needs to determine how best to approach insurtech, by considering the following activities:
The pace of technological change requires insurers to keep abreast of evolving insurtech trends, namely:
If they are to grow and be competitive, insurers need to leverage and integrate insurtech solutions, either through acquisitions, direct investments, innovation labs or services agreements. Having a clear insurtech strategy can help them achieve this goal.