From the app that arranges insurance for a day to the online service that pays claims in less than one minute, digital technology has transformed the face of the insurance sector. Post takes a closer look at the insurtech movement and its partnership with traditional insurance, exploring each sector’s hopes and concerns
Between May and June 2018, Post launched two surveys to obtain opinion from the insurance and the insurtech sectors regarding the digital insurance landscape in the UK. In total, the survey received 214 responses from insurers, reinsurers, brokers, managing general agents and members of the insurtech industry.
All responses, complete and partial, have been included in the results and the data collected from the two surveys has been anonymised. The major findings of both surveys were collated and sent to key industry figures from both sectors for further comment.
52% of respondents came from firms with more than 1000 people, 67% were male and 53% came from insurance companies.
Around two-thirds of the insurance industry currently works with insurtechs and this figure is likely to climb. However some insurtechs are beginning to doubt the value of teaming up with insurers because the attention they receive does not translate into action. Insurers may need to become more proactive with their insurtech partnerships.
“Insurers and insurtechs are have become increasingly collaborative over the past few years, and we expect this trend to continue. The report does highlight however that the ways insurers and insurtechs operate are still different and so working together can always provide opportunities for new and innovative products for customers.” Darrell Sansom, chief customer & innovation officer, Axa UK
“The technology tail should not try and wag the dog. The idea that insurtechs need to partner with an insurer is a mistake They need to look at ways of staying carrier agnostics for much greater growth potential and increased value add to policyholders.” André Symes, director, Genasys Technologies UK
Insurers and brokers overwhelmingly judged improved customer engagement as the top positive outcome anticipated from partnership with insurtechs, followed by improved efficiencies, moving traditional insurance forward and speed to market. Immediate financial returns were at the bottom of the insurers’ wish list, despite over of 50% insurtechs believing this is the top priority for insurers.
Artificial intelligence, apps, portals and insurance on demand are the top priorities that both insurtechs and insurance companies believe they should be focusing on.
“It’s clear digitisation is a process that is important to all aspects of insurance businesses, and needs to be driven from the most senior levels within firms to really get traction.” Matt Cullen, head of strategy, data and analytics, Association of British Insurers
“It is concerning to see that insurers ranked millennials near the bottom of their top tech priorities. One only needs to look at mobile and social media culture to see that this market cannot be ignored. If you address the millennial needs as an umbrella project, all the other topics will be covered organically… the internet of things, artificial intelligence etc are all in the millennial subculture already.” André Symes, director at Genasys Technologies UK
Insurance companies remain wary of the global tech giants and what they might deliver, but closer to home there are more immediate obstacles to address.
“It is incumbent on us to recognise the exciting opportunities these threats present. The responses reflect many of our own experiences of where the challenges can be. For an industry which is naturally risk averse, the reality is that some of these opportunities require us to step into the unknown and therefore involve a level of bravery.” Ben Fletcher, director, Insurance Fraud Bureau
“Threats are everywhere and motor will see the most disruption. Any large tech player should they make a bold move into the industry will disrupt it. I agree with Amazon at the top as we are just not sure where they may go next.” Mark Budd, head of innovation UK, Zurich
While the insurance industry has made great improvements in terms of diversity within organisations, there is still much to be done, according to the insurtech voices in this report, many of whom don’t understand why insurers aren’t taking diversity more seriously.
“Insurtechs are by definition at the very cutting edge of modernity, so perhaps it should come as no surprise to discover they perceive themselves as being more agile than insurers are, give even greater priority to diversity than brokers or insurers do - and also overwhelmingly believe that all or most of today’s firms will disappear if they fail to embrace digitalisation.” Lord Hunt of Wirral, chairman, British Insurance Brokers’ Association
“Insurtechs certainly contribute to a healthy opening up of influences on an incumbent’s thinking and they also often display agile working practices that do not just deliver good results but also very engaged and customer-centric people.” Glen Clarke, head of transformational propositions, Allianz
“The diversity of our workforce is crucial to our success. A diverse workforce enables us to see challenges from a range of different perspectives, and uncover better solutions to our most challenging problems. This should be a top priority for any organisation looking to build a resilient and successful future.” Richard Hartley, CEO, Cytora
The full report is available free to premium subscibers or can be purchased via CS[email protected]
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