When you consider the cutting edge of technology – the Internet of Things, drones, or telematics, for example – all these things have been quietly pioneered by insurers already to provide personalised products and services, years ahead of other sectors. Quite surprisingly, you might say that insurance is very much at the forefront of the fintech wave when it comes to responding to external factors.

But what about the changes happening at the core of the industry itself? A moniker that’s becoming much used is “insurtech”.  Cloud computing, smartphone hardware, and apps are being exploited to transform old processes and enable new ways for customers to obtain and remain insured, and for insurers to engage digitally with customers.

What’s particularly exciting is how insurtech is bringing forward not only new software but also new services and business models for the industry. Here are a few examples:

• Cuvva lets you take a picture of a car number plate to buy coverage on an hourly basis;
• Digital Risks specialises in digital businesses and offers pay-by-month protection designed for start-ups;
• Friendinsurance brings insurance into the ‘shareconomy’ conversation, with cashback pools where people with the same insurance type join the same group;
• Knip moves the entire brokerage and policy management process for insurance brokers to their mobile phone;
• Versicherix provides a usage-driven, self-governing, P2P insurance;
• Brolly uses artificial intelligence to provide customers with their very own personal insurance ‘concierge’; and
• Trov offers household insurance with a smart repository of your possessions, using third-party data streams to track their value after you’ve scanned the barcodes or receipts.

On the surface, these insurtech start-ups might seem to be challenging the more established insurers, but the picture is much more nuanced. We’ve already seen several start-ups with a particular area of focus being bought up by larger companies, but there are other more creative ways that the bigger enterprises can engage and even learn from the newcomers. Insurers are now more willing to collaborate and work in partnership than ever before, recognising that it is impossible to do everything on their own.

An example, today we’re seeing the launch of venture teams, accelerator panels, and internal “incubators” bringing a start-up mentality to corporate organisations. This is “intrapreneurship” – entrepreneurial activity positively nurtured within a large, established business.

This internal focus on seeing new opportunities being largely customer-driven, making the most of limited resources and, above all, moving quickly when resources or opportunities become available, is a great way that large enterprises can avoid being pipped to the post by younger, more daring companies. This is only possible, however, if the large company is willing to invest in software that allows them to innovate and flex internally. Without this ability to change, they will find that they are unable to adapt to the next big thing.

These “businesses-within-a-business” benefit by having capital investment from their larger parent company, as well as the flexibility to adapt to developing customer needs.  A great example of this is US insurer MetLife Insurance which has developed a new digital customer experience in its motor business. An aggressive timeline to bring the app to market rapidly depended on how the business created an insurtech hot-house within its business, empowering staff to be creative, nimble, and driven.

Like fintech, sometimes insurtech seems synonymous with start-ups who are challenging the establishment. The reality is that the success of insurtech depends on how start-ups and larger insurers work together, supported by the right software. I hope to see even more fruitful partnerships in the coming year, as businesses learn from each other in their efforts to satisfy increased and evolving customer demand.