Innovation across the insurance industry is about more than just new technologies and solutions, but includes behaviours and attitudes. And while incumbent insurers are increasingly looking to purchase InsurTech firms, there’s a risk of complacency, according to James Lay and Matthew Jones from Simplitium, a provider of risk analysis.
In a recent post, Lay and Jones underline the growing importance of data across all modern businesses. The wealth of new data is made available, processed, and analysed through new technology, which continues to advance at a rapid pace and which is increasingly looking to disrupt the risk transfer industry.
The pair highlight numerous InsurTech companies such as Lemonade and Insurwave, as well as advanced software like ModEx and the Oasis Loss Modelling Framework, among others, but which all leverage technology in order to improve the efficiency and/or the end customer experience.
“While these examples are encouraging, it remains the case that many of the new innovative and disruptive fin/insurtech firms that have sprung up are at risk of being purchased by the incumbent players in the industry and may disappear inside the larger corporate body.
“The danger remains that by buying a fintech, the incumbents feel they have fulfilled their innovation requirement, but nothing has truly changed at the core of their business,” says Lay and Jones.
Historically, the insurance industry has been slow to adopt new tech, something Lay and Jones says is mostly a result of high running costs of systems. However, technology is advancing at a rapid pace and increasingly influencing businesses, industries and markets, and the insurance sector would be wise to keep up.
“The old adage of ‘Innovate of die’ remains highly pertinent for an industry that needs to embrace the potential of technology soon or face becoming increasingly irrelevant. Innovation is as much about mindset, attitudes and behaviours as it is about new technologies and solutions.
“The real revolution required is to evolve the prevailing culture across the industry so that organisations become more inquisitive, agile and willing to explore the benefits new technologies may deliver,” Lay and Jones adds.
