Article Synopsis :
This year has been transitional for InsurTech. The proof of concept is no longer enough for executives – they want to see execution and results.
As a result, it is expected that boards will focus on a 12 to 24-month P&L impact. This approach will mean greater interest in back-office functions and data & analytics innovators, process automation and digital administration and claims platforms will become a primary focus.
Distribution and innovation will remain important but focused more on the capacity provision to InsurTechs rather than in-house innovation.
Building on the point about results, the report also sees more top-down management of innovation so that the objectives of the development labs, teams, etc, are aligned to group objectives.
There will be clustering around ideas that gain traction when the industry expects to see results, requiring careful due diligence.
There is a desire for insurtech companies to collaborate with insurers – for now. If insurers fail to engage, some insurtechs may simply choose to compete against them, with ample opportunity for considerable disruption.
This has already happened with a number of ‘full stack’ InsurTechs launching in the past couple of years. These digitally-led, legacy-free startup insurance companies such a Lemonade in the US – or Coya, Ottonova, ONE and Element in Germany and Alan in France have little reliance on the traditional insurance market and are going toe to toe with incumbents.
The need for executives to get with the program is clear and the report offers a useful checklist to help them ensure they make the most of the opportunities to harness emergent technology, covering: leadership; strategy; execution and funding; and performance and investor communication.
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Digital Insurer's CommentsThe message from Oxbow is that insurtech could be a game changer for insurance companies. They do qualify that by saying “only if they back the right horses”.
It raises some interesting thoughts, offers some priorities for executives to get to grips with if they are not to be left behind and focuses on 25 insurtechs it believes will have an impact on the market over the coming year.
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