Some investment criteria into insurtech start-ups “don’t make sense over time”, warned Neil Harrison, global head of claims at Aon Risk Solutions.
Harrison told the Insurance Claims Management Conference in Budapest that $14bn had been invested in 550 insurtech start-ups, with a lot of those funds coming from private equity. “They are not all going to make it,” he predicted, noting that many investors have an “attention span of three years”.
He urged delegates, when contemplating innovation, to ask themselves: “Is it valuable to the customer? Is it sustainable? If not, it’s a fad.
“Disruption can mean the displacement of established market leaders, that’s a threat point,” Harrison admitted, noting incumbents have market shares to lose. He stressed however that a lot of innovative solutions developed by start-ups use intellectual property from established players: “Not everything that’s innovative comes from a start-up.”
While he urged the industry to adapt to changing customer expectations, he warned against innovation for the sake of innovation. New technology can gather huge volumes of data but asked: “Are we actually going to use the data we collect? Why do we need this? If we’re not going to use it, let’s not invest in collecting it.”
A fantastic effort from 4 of our Cambridge office team who participated in a skydive at the weekend for UK charity partner @RainbowTrustCC #Welldone to Elise Hackney, Caitlin Shevlin, Uzma Malik & Marwan Alnoor #kennedysCSR #makeadifference pic.twitter.com/rNq0QbLD0q— Kennedys (@KennedysLaw) June 26, 2019
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