The rise of InsurTechs - how will the insurers stack up?
InsurTech firms are having a transformative effect on the insurance industry. Studies show that at least 86% of insurers think their revenues will be at risk from future technological disruption – and perhaps nothing demonstrates this better than the rise of game-changing InsurTech.
So what caused the rise of InsurTechs? And why was it essential?
Insurance Technology often referred to as "Insurtech" emerged around 2010 as a branch of a comparative endeavour in banking, known as (financial technology)"Fintech."It is most reliably used to refer to the use of wearable's, big data, apps, machine learning, and other transformative advancements to policy origination through underwriting, services, and claims.
Despite being moderate to adopting new tech, insurers are beginning to form interesting progress in this field. Technology-led companies are starting to enter the insurance sector in expanding numbers, which at first a few saw as possibly posing a threat to insurance incumbents, but it has also displayed an opportunity for insurance incumbents to partner with new companies and guarantee that their offerings are aligned with the needs of a changing world.
Presently, during the Covid-19 pandemic ,when the world has been constrained to create sudden and far-reaching changes, InsurTech firms has seen a renewed rise in investment .These InsurTech firms are filling gaps and traditional capabilities while enhancing processes across the insurance value chain.
InsurTech firms leverage emerging Technologies to rapidly develop and deploy innovative offerings which are customer-centric. These are some technologies used :
InsurTech firms strength and skill vary by speciality.
Most InsurTech Leaders believe their most critical asset is:
Their ability to cater to the new market demand
They also have new heightened agility
Can build sustainable competitive advantage
Easy to collaborate and integrate with ecosystems
InsurTech firms also face challenges
InsurTech firms face problems when planning to increase production capacity and when scaling up because InsurTech firms often lack:
Familiarity with regulation
Despite these disadvantages, traditional insurers and InsurTechs strongly believe InsurTechs are redefining Insurance customer experience. Over the past few years, we have seen established insurers and InsurTech acknowledging each other as valuable potential collaborators.
So in the face of such disruption what will it take to be a winning Insurer or InsurTech firms In the future?
According to The inaugural World InsurTech Report (WITR) 2018 from Capgemini and Efma the path forward is paved with strategic collaboration between insurers and appropriately paired InsurTech firms this will help forge new Customer-Centric ecosystem models. InsurTechs are redefining the industry and gaining traction, Investment within the InsurTech grew 36.5% annually from 2014 to 2017.[]
Insurers need to re-evaluate their product portfolios and engagement procedure to cater to customers’ advancing needs and preferences. Establishing compatible partnerships with InsurTech firms and other businesses is essential for success, illustrated in Figure 1.
For Insurers and InsurTech firms to be long term winner’s competitive capabilities and traits are essential. Collaborating with each will also be critical to shoring up weakness, acquire new attributes and skills and grow the market and ecosystem.
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