Library: CIO Online – Insurtechs: How to Make it Work

Executive summary :

The rapid rise of insurtech in the last decade has improved the insurance offering across the entire value chain. The growing disruption by the insurtechs has forced traditional insurers to start investing in areas like digital technologies to improve the customer experience, automate processes to reduce costs, enhance product development, make policies more affordable and service claims more efficiently.

Insurtech partnerships are popping up all over Asia  

This impact has been transformative to an industry that for years relied on traditional modes of operation with minimal technology. As insurers and insurtechs alike realise the benefits of these partnerships, what should they consider to best work together?

Examining the impact

Insurtech has played a critical role to enhance some of the key areas of the insurance value chain, such as: .

• marketing and sales;
• product innovation and risk rating;
• customer engagement;
• claims servicing; and
• customer service

Partnerships are key

Relationships between insurtech providers and traditional players are evolving and it has become clear that there is merit in partnerships for both groups. In 2018, investment in insurtechs surged to USD$3.17 billion, nearly double the value from 2017.

To understand how traditional incumbents are responding, according to Capgemini’s World InsurTech Report 2019, 68% of insurers say partnership is critical and over 60% of insurtechs wish to work with insurers to build technology infrastructure for open collaboration.

This is driven by the fact that most insurers still operate their policies, commissions, claims and finance systems on mainframes, making it difficult to harness emerging technologies. There is also the issue with scale. Many insurers fear the sheer complexity of the implementation required and the scale of organization change needed to make the transformation successful.

As a result, partnerships between insurers and insurtechs are popping up throughout Asia. For example, Generali Hong Kong has an Asia-wide partnership with Blink to develop innovative data driven travel disruption insurance solutions. Tokio Marine has partnered with Plug and Play in Singapore and Chubb is collaborating with ride sharing company Grab to provide in app insurance solutions.

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