It is no news that insurers are perceived as traditional, boring and slow anticipating incumbents. You can argue if that is really the case, but a new generation of insurers is emerging within the Fintech (or in InsurTech for insiders) domain.
These startups are ready to disrupt the insurance market, but can they do it solely on their own or do they need partnerships with traditional insurers?
Digital Insurance Agenda
You might not have missed the mayor investments in new insurers like Oscar Health ($727.5M) and ZhongAn Insurance ($931.3M) in the past few years. No wonder these two insurance companies reached place 1 and 2 within the Fintech 100 in 2015. With these companies at the frontier, it seems like the Insurtech is catching up to the rapid fintech developments which are already disrupting the banking sector the last few years. For the first time, a global focussed Insurtech conference was held in Barcelona, Spain. The Digital Insurance Agenda (DIA) had over 50 insurance startups, keynote speakers from companies like AXA, Generali and Celent and accommodated 500+ insurance thought leaders from 200 companies from 36 countries that discussed, showed and networked over a 2-day event.
“Everledger is a schoolbook example of how new technology can help insurers lower their fraud losses”
Mobile is the key (also in insurance)
Insurtech is a broad term (as is Fintech), but it’s main focus is the replacement or improvement of insurance services. The first thing I’ve noticed was the huge variety in startups from (big) data to insurance broker enablers and fraud preventing platforms. Each of the 50 startups had 10 minutes to show & tell about their proposition and some of these startups where definitely better than others.
One key aspect of the event was that user interaction on mobile devices (Apps) is clearly an important part of the new disrupting startups for B2C. Startups like (soon to launch) Trov, Finance Fox and KNIP focus on optimizing the customer experience and giving the user full control of their insurance on a small mobile screen. This might be the key why these companies already convinced investors to invest $38.8M, $5.5M and $18.3M respectively. The B2B startups mainly focused on the quality of their service and almost all offered an easy way to integrate with existing applications. Jouk Pleiter from Backbase stated that this is key and that insurers should open up their framework to interface with this new Insur-/Fintech partners.
A few different perspectives on insuring
“Insurtech is a broad term (as is Fintech), but it’s main focus is the replacement or improvement of insurance services”
Others startups on the DIA agenda focused on claim handling, fraud prevention with data, machine learning, digital distribution and gaining quantified-self metrics. The much discussed startup Lemonade unfortunately wasn’t present and our feeling is that the startups present at the DIA are only the tip of the iceberg, when it comes to promising new Insurtechs. Nonetheless, having a first time Insurtech centered event on this scale, could mark the beginning of a new chapter within the new digital insurance sector.
If there is a general take-away from DIA, then it would be that there are enough new and existing Insurtech startups that are ready to collaborate with traditional insurers to change the landscape together. New solutions within data analytics, machine learning, customer satisfaction, fraud prevention, marketing or rapid (app) development are within reach. For insurers it’s key to find these new companies and team up, to create a new ways to service your customers to maintain a competitive advantage within the digital insurance future.
Author: Len Debets, KPMG Innovative Startups - FinTech