Application of InsurTech to re/insurance has seen a considerable shift this year, moving out of its fledgling stages of development into what could be considered an intermediate level of adaptation to technology and Artificial Intelligence (AI), Startupbootcamp InsurTech said in its latest tech trends report, issued in association with PwC after gathering data from 633 start-ups.
Evidence for this shift is apparent in what’s been called the “second wave” of emerging InsurTech start-ups which are able to tackle complex and wide-ranging problems that are better aligned to re/insurers’ needs.
Sabine VanderLinden, Managing Director at Startupbootcamp InsurTech, commented on the trend; “As digital first personal lines platforms become more pervasive, the more complex needs of commercial lines providers will become a key focus area for start-ups, looking at technology to improve internal processes across the insurance value chain and agreeing that the digital journey and engagement remain at the core of that equation.
“Maturing start-ups will need time to prove their value in an industry where KPIs such as claims ratios can take time to be realised, insurers need to transform how they work and these collaborative models will take time to embed.”
A common trend is for start-ups to focus more heavily on artificial intelligence, honing in on and refining technologies as they emerge.
Another factor uncovered is that currently only about half of InsurTech start-ups are focused on customer-facing models, compared to 61% in 2016.
This indicates that start-ups are turning to solving internal problems faced by re/insurers, especially in areas of underwriting, where four times as many applicants focused specifically on underwriting processes, the report said.
These sophisticated start-ups could pivot the industry into its fuller potential, and their impact is compounded by re/insurers showing signs of having learnt the most essential ingredients to leverage this potential collaboration.
Statistics show re/insurers are learning quickly – catching on to the best ways to collaborate and share platforms, knowledge, customer bases, and experience to multiply revenue and reduce costs.
Last year, just 28% of insurers were exploring partnerships to leverage InsurTech, but in a short period of time this has shot up to nearly half at 45% this year so far.
Jonathan Howe, Global InsurTech leader at PwC, commented; “InsurTech has had an exciting year and it’s been great to see such an uptick in insurers interacting with start-ups. The coming months will be critical, as both parties work through their differences to achieve real change for their business and their customers.
“In order to make the most of all the work put in so far, the insurance industry must be agile and jump at the opportunities that InsurTech presents to deliver for the good of all – new entrants, incumbents and customers.”
Naturally, the process of learning and adjusting has not been smooth for the industry, with both sides seeing successes and failures as they walk the tricky path of collaboration, but all signs point towards a fast learning and growth process.
The report warned, however, that if insurers or start-ups struggle to deliver value and lose patience within the window of opportunity, collaboration could pivot towards disruption.
And despite growing by leaps in bounds, InsurTech is still falling short in being able to attract diversity of talent; just one in six of the individuals driving the start-ups applying to Startupbootcamp InsurTech in 2017 were women.
Launched in 2015, Startupbootcamp InsurTech has attracted industry support as the insurance accelerator that focuses on identifying globally-located disruptive and collaborative insurance and technology innovations.
