A watchful eye on insurtech
Keeping pace with developments in insurtech and attracting and keeping the best talent are high on the agendas of executives attending Baden-Baden this week, according to an online survey carried out by Intelligent Insurer ahead of this renewals season.
“Technology is not exactly a core competence of many senior executives.”Keen to establish how different companies are approaching the complex landscape of insurtech, we asked respondents to characterise their approach to developments and explain how they are reacting to this phenomenon.
More than 45 percent said they are developing their own technologies in-house—as opposed to partnering with external providers. Yet a high percentage also said they are keeping a watchful eye on developments in the market. Some expressed nervousness about being left behind—rather than excitement over the opportunities insurtech could offer.
“To some extent, I think many in the industry feel paralysed by what is going on,” one respondent said. “They want to act, they feel they should act, but they are also scared of making the wrong call. Bear in mind that technology is not exactly a core competence of many senior executives.”
Another added that while his company is making all the right noises around the potential insurtech can bring, internally there is also great nervousness.
“One thing that always seems to come up is whether we will be in business in five years or simply working for Amazon or Google. Those guys are so clever, there is a sense we could never compete if they moved in, although as I keep saying, taking risk on to a balance sheet is another matter.”
Some 9 percent of respondents said they believe insurtech is a bubble that will burst at some point. “It’s like the dotcom thing all over again; sure, there will be benefits but trust me this hype will burst,” one respondent said.
Another made the point that, while he believes it is hype, it is also good that much of it is being funded by external money. “The venture capitalists pay, and they also take the hits. We benefit if something good is developed,” he said.
Talent and cyber
Outside insurtech, talent and cyber featured heavily when respondents were asked for other issues on their agendas. One noted that after several years of cutbacks and the distractions of M&A, the industry had “forgotten” to keep recruiting new talent.
One attempted to explain: “There are graduates sitting around but I have no idea who could really run things in the future because they are not being trained or exposed to the real world.
“They think a soft market is normal and are more concerned about diversity than profitability.”
That said, profitability remains a big issue on the agendas of reinsurers, as does how to handle emerging risks such as cyber.
Some expressed a positivity on this, arguing it was a growth area. Others were less optimistic. “I think cyber risk will bring us all down,” one said.
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