Library: Hannover Re – The changing relationship between insurers and insurtechs
Executive summary:
How do we define insurtechs as the sector changes and expands?
Insurtech is a very broad term nowadays. We commonly think of insurtechs as companies that offer digital insurance using technology, selling insurance products directly to the customer and hence competing with traditional insurers. However, startups that create solutions to accelerate underwriting and improve claims automation, processes, sales and distribution are also part of the insurtech ecosystem − and these are B2B solutions offered to (re)insurers. Healthtech startups are also considered insurtech, as they develop and sell innovative solutions to insurers.
How do you interact with insurers and insurtechs?
I constantly exchange with (re)insurers and insurtechs at a global level. This gives me a macro view of what is available and what is needed. Digitalisation and innovation are moving at a different pace in different parts of the world. Some regions have a lower penetration of insurtech solutions, others are more mature. Hence, there is room to help local insurers to innovate and to support startups entering new markets. It is a little bit like match-making, as well as supporting the research and development processes of insurance.
Why do insurers need insurtechs?
As B2B providers supporting digitalisation, insurtech startups are agile and can dedicate full-time the necessary energy and resources to develop innovative insurtech solutions that insurers can plug into their own solutions. Insurers, by contrast, would need huge resources and a lot of time to disrupt their own legacy technology. Another good reason is that insurers can test and learn with insurtechs, either with a specific product or in a specific market. This way, they can build experience about what works and what doesn’t in conjunction with their own business.
Insurtechs that sell directly to consumers and corporates provide healthy competition and influence insurers to speed up their digital transformation and their brand “coolness” to sell products to younger generations.
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