Insurtech is continuing to strongly influence the direction of the insurance industry, according to a report. It also reveals how necessary it is for insurers to collaborate with technology firms who, while being innovative, also understand the culture and values of traditional insurers.
Accenture’s “The Rise of InsurTech” discusses the growth and value of deals in the insurance technology space in 2016 and examines the relationships between traditional insurers and insurtech providers.
A key finding is that almost half of all investments in insurtech were for the development of artificial intelligence (AI) and the internet of things (IoT). The number of deals for both areas rose by 79 per cent in 2016 – in 2015 they attracted a mere 10 per cent of money invested.
Insurers view AI and the IoT as ways to personalise their offerings, improve the customer experience, and gather more meaningful data – with insurtech providers facilitating the digital transformation. A whopping 86 per cent of those polled believe they must innovate immediately to remain competitive, and must do this by collaborating with technology partners.
But despite this willingness to embrace change, traditional insurers and insurtech startups sometimes have an uncomfortable relationship. This is because of the ‘300 years versus 300 days disconnect’. That is, the established cultural values and long history of insurers against the enthusiasm and ‘born-yesterday’ mentality of startups.
According to the report, insurtech culture still doesn’t fully understand insurance culture, with startups becoming frustrated by the large scale of traditional insurers and their risk-adverse nature. The CEO of insurtech specialist SPIXII, Renaud Million, says in the report: ‘Startups with little or no prior knowledge of the insurance industry struggle to quickly demonstrate their value proposition and make tangible impacts’.
RDT has the knowledge and experience to bridge this gap. It has the drive and innovation of an insurtech startup, but the benefit of decades of experience partnering insurance companies. So when insurers look for the right digital partner, they should remember that the market is not necessarily defined by startups. Instead, established insurance specialists such as RDT offer the best of both worlds: innovation backed up with inside knowledge and experience.