Insurtech can be a double-edged sword for insurers, a fact underlined in a report published in the Financial Times on October 14. The heading – ‘Insurance sector worried as insurtech startups cosy up to customers’ – reflects the growing threat posed by new technology as challenger brands move into space that was once the preserve of traditional insurers.
Research by the US investment bank Financial Technology Partners reveals that insurtech companies raised $2.6 billion last year – more than the five previous years combined – while PwC reported earlier this year that almost half of insurance companies believe they will lose 20 percent of their business to insurtech companies over the next five years.
The Financial Times suggests that one of the biggest challenges for insurers is how to keep control of distribution. Many are now looking for ways to protect their businesses before it’s too late, not least by setting up their own internal accelerators to develop new technology.
With the marketplace changing so rapidly, insurers need to ally themselves with technology experts such as RDT, whose business ethic has always been innovation through collaboration. It’s an approach that’s emphasised in the new issue ofPrism, RDT’s technology newsletter. In an article entitled ‘Insurance upstarts’, RDT discusses how to outmanoeuvre the growing number of startups and stay ahead in the technology arms race. Below is an extract.
“RDT’s core products, Equator and Landscape, provide a modular and constantly evolving insurtech platform. And, with the software-as-a-service increasingly in demand, RDT is creating a cloud-based model that enables insurers to move quickly and selectively, turning services on or off as required. No monolithic structure, no inertia, no heavy IT investment. Just powerful insurtech to the fuel the business and keep it moving ahead of competitors.”