Insurtech needs to bridge the gap

There needs to be a seamless journey from insurtech disruption to insurance transformation, according to Dan Cole, partner insurance & digital, technology and analytics, and Raphael Caruso, engagement manager, insurance and digital, technology and analytics at Oliver Wyman.

Speaking at the Intelligent InsurTECH Europe 2018 conference in London today, Cole and Caruso said that there can be a gap between expectation and reality. For insurtech companies that are focused on risk/underwriting capabilities, business development opportunities and investment, the reality in dealing with insurance companies can involve long and painful procurement processes, complex project governance and dealing with a risk-averse and analogue mindset.

However, from the insurance company prospective, for companies that expect innovative value propositions and technological skills the reality in dealing with insurtech companies can be products with an unclear value proposition, a lack of insurance knowledge, early stage developments with no concrete products and finally their own lack of ability to implement disruptive solutions.

According to Cole and Caruso, 69 percent of startups feel that the industry is moving towards more ‘greenfield’ operations and is willing to cannibalise existing products.

They claimed that insurtech companies need to be impatient, need to work to find the change agent, should collaborate with other insurtech companies and should use advisers to navigate the insurance jungle.

Cole and Caruso added that insurers need to work with insurtechs to innovate propositions and unshackle themselves from the existing technology stack. They also need to test products and learn from such tests.

Finally, Cole and Caruso shared a survey result: 88 percent of startups think that within five years tech giants such as Facebook, Google, Amazon and Rakuten will have had a significant direct impact on the insurance industry—but that only 65 percent of incumbent insurance companies share that belief.

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