The insurtech sector has been steadily growing for quite a period of time and is clearly having an enormous influence on the traditional insurance field. In fact, according to a report by Accenture, 96% of insurers believe that digital business models are having an impact on the insurance industry. Others view insurtech as a disrupter and a transformer of an industry that brings innovation and new ideas to the table. It has opened up numerous opportunity doors through technology-led business models that target the end-customer. From tailored offerings to mobile products, insurtech is changing the market for the everyday person.
Markets are also quickly responding to the insurtech developments by not only shifting focus towards the customer, but also applying regulatory measures to these new players. Singapore, the United Kingdom and Germany are examples of countries that have taken insurtech seriously and have lowered the regulatory barriers for new companies. Below, we explore the insurtech ecosystems, providers, trends and future challenges.
Ecosystems and our ventures
A recent KPMG report provides a thorough overview of the trends to watch out for in insurtech. Apart from the regular trend of digitalization, the report puts emphasis on ecosystems. These ecosystems allow insurtechs to be the pioneers of the market space, providing customer-centric solutions in an easily accessible way. finleap provides three clear players that have brought never-before-seen ideas and have filled service gaps in the insurance market.
ELEMENT is a white-label product factory for insurance and is licensed by German BaFin as a direct insurer for non-life insurance. Able to underwrite throughout Europe, ELEMENT supplies its partners from various industries with a wide range of products, from personal liability to cyber protection, to innovative B2B solutions. Thanks to the company’s modular technology platform, ELEMENT is able to tailor these products to the needs of the respective target groups and to offer an average go-to-market time of four weeks. ELEMENT’s partners then distribute the insurance products under their own name.
CLARK is a digital insurance broker that provides a full insurance package and smart insurance management and advisory services to its clients. With a process that facilitates easy buying and management of insurance contracts, CLARK enables consumers to have access to insurance any time, anywhere.
Joonko is the most recent addition to the finleap insurtech ecosystem. The digital portal enables customers to find financial and insurance products tailored to their individual needs. Joonko launched its first product in the automotive insurance field in October 2019. Further products are going to be released in the near future.
Recent market trends
The change of legacy systems
Insurtech is here to stay when it comes to bringing change to the traditional legacy system. Improved access to data that includes high-speed technology, compliance and improving the overall customer experience is essential for the insurance industry to thrive. The infrastructure that has to be put in place has to be agile and easily adaptable to new processes and behavior in the market. Some of these new systems even have the capability to analyze customer behavior and bring tailored services to the market based on this behavior.
The digital customer
Insurance is no longer for the experienced. In fact, as more and more digital natives enter into the working space, insurance has to shift its focus towards the digital. Simply put, business models have to adapt to the needs of the digital consumer which are quite different than anything seen by the insurance industry before. Insurtechs have to ensure that customers are at the center of the business model, providing insights on what products they need and what platforms they use.
Compliance and transparency
It seems as though compliance is common sense in an industry that deals with so much data. Data is becoming more and more essential every day and customers are aware of that fact. Insurtechs need data to gather insights, but they also need to build loyalty and trust in their consumers. Therefore, full compliance and transparency are vital for the survival of any company in the long run. This also means that roles for specialists in law and underwriting, as well as data analytics, will be prominent within the changing industry.
Integration of new technologies
Although already experts in digitalization, insurtechs have to constantly update their technologies of choice. With the rapid rise of new developments like artificial intelligence and machine learning, insurtechs will have to find applications throughout the business model to increase efficiency and improve their service offering. These new technologies might bring a revolution to the already changing insurtech industry.
Future challenges for insurtech providers
Insurtech providers are facing many challenges on the road to full transformation of the traditional insurance industry. To start with, insurance products and services can reach very high complexities which can often be confusing to both emerging companies and the end consumer. Therefore, insurtechs have to provide a clear and concise offering that is easily understandable and is found appealing by potential customers and partners.
Next, insurtechs have to create adaptable products that are easily integrated within an ecosystem of services. These products have to not only enhance traditional capabilities but also work together with others in the market to provide a holistic service. Only with this collaborative mindset, will insurtechs fully redefine the customer experience while developing mutually beneficial relationships with other providers.
Finally, insurtechs have to put an extreme emphasis on building customer trust and loyalty through transparent services, responsive customer service and reliability. Defining and leveraging a consistent customer base will bring a competitive edge to the industry.
Would you like to collaborate with us or one of our insurtech portfolio companies? Please feel free to reach out to Alex Khoroshko, Business Development Manager at finleap connect: firstname.lastname@example.org