How insurers are reacting to insurtech opportunities

Insurers have been debating how to make use of opportunities offered by insurtech to make their processes more efficient and create more competitive products at a November 16 Intelligent InsurTech Europe conference in London.

The discussion showed a variety of different approaches such as acquiring an innovative new player, developing solutions in-house or sponsoring start-ups in incubators. But many companies are following several routes at the same time.

Several delegates also discussed this challenge in live interviews with Intelligent Insurer.

“We have created a data innovation lab where we have more than 90 data scientists operating,” said Cécile Wendling, head of foresight at AXA.

The Paris-based insurer has also invested in several start-ups and created an internal company-wide innovation competition where employees can pitch ideas which are then submitted to vote and implemented if successful, Wendling said.

In addition, AXA has an incubator with start-ups which may disrupt the traditional insurance business model. “We are investing in what could actually kill the business as we know it today,” Wendling said.

Italy’s Generali has been investing in young companies for example in the telematics space. In 2015, Generali acquired full control of MyDrive Solutions, a company founded in 2010 focused on developing data analytics tools to profile driving styles and produce tailor-made products for customers with favourable tariffs for low risk drivers.

In addition, Generali has partnered with South-African insurer Discovery to launch innovative health and protection insurance products. As a result, it launched the Vitality brand in Europe, a behavioural-based shared value insurance model that encourages and rewards customers to improve health and well-being. Vitality health insurance was first introduced in Germany with a view of expanding elsewhere in mainland Europe.

The plan offers between 5 percent and 10 percent lower rates in term life and occupational disability insurance policies to clients who make available data that proves that they are engaging in a healthy lifestyle. Members can, for example, improve their status through sports activities, regular medical check-ups, quitting smoking or having a healthy diet.

“We are always looking out for what is going on and deciding on specific areas where we should get involved,” said Generali’s global head of connected insurance Steven Hales.

Munich Re is getting involved in the insurtech trend to remain on top of developments in the insurance sector.

“We set up a unit, Digital Partners, to work with insurance start-ups to find solutions for the challenges insurers are facing at the moment,” said Yannis Korgialos, Munich Re’s partner development manager.

Through the digitisation of business processes carriers can improve efficiency and develop more competitive products.

Tokio Marine Kiln is looking to partner with different communities from outside its operating environment to bring expertise in-house. At the same time the company is watching out for different business models to see if new ideas can be introduced to its own processes.

“We at Tokio Marine Kiln have launched a digital platform which enables us to service the insurance market all the time, any time, on demand basically,” said Tom Hoad, head of innovation at Tokio Marine Kiln.

“We are looking to migrate a whole set of different insurance products that are suitable for that model and we are looking to include within that a range of services that otherwise are not available,” Hoad explained.

“One of the by-products is that the data set that we are getting is very clean and that we can better analyse that for better risk insight for example,” he added.