New research, based on more than 1,300 start-ups from across the world focusing on the insurance industry, highlights the potential for start-ups to improve the industry, a new report out from Startupbootcamp InsurTech and PwC today shows.
The research shows that more than a third (35%) of these insurtech start-ups are focusing on ways to improve customer relationships.
Insurance companies are benefiting from an influx of new technology and are focusing on how new insurtech products can redefine the way they interact with customers. 75% of incumbent established insurers believe the biggest impact to the industry will come from building new products in order to address the changing needs of the customer. Incumbents see these new products as an opportunity to redefine customer interaction.
Accelerators, such as Startupbootcamp InsurTech, aim to showcase how incumbents and start-ups can work together to take advantage of each other’s diverse range of talents and break down the disconnect in priorities and approaches.
The majority of new players do not seek to replace existing insurance companies, considering themselves enablers rather than disruptors. By focusing on what insurers consider to be the main challenge for the insurance industry - providing customers with the most suitable product - insurtech start-ups can work alongside incumbents to effect swifter change.
The report finds that a smaller number of insurtech companies are focusing on helping insurers cut costs and improve efficiencies through the use of data analytics and streamlining the back office - a trend already present in the banking sector. If start-ups can successfully help insurers reduce their cost of doing business by better analysing data and utilising new technology, such as sensors and wearables, the industry could pass some of these cost savings on to the customer while also improving its competitive position.
Jonathan Howe, UK insurance leader at PwC, commented:
“If insurtech start-ups and incumbent companies can successfully work together to build new and relevant insurance products whilst cutting their operating costs and passing some of these savings on to the customer, it is not just an opportunity to increase profitability, it is a real chance for insurers to build and retain trusted relationships with customers.
“This is developing into a real opportunity for the industry to change its somewhat tumultuous reputation with its customers and continue to tackle some of society’s biggest problems.
“The industry is moving towards a role in which it helps customers prevent loss or damage, not just reimburse them after an event. By embracing new technology and ways of thinking, the insurance industry can underline its role as a trusted partner to both consumers and businesses.”
Sabine VanderLinden, managing director at Startupbootcamp InsurTech, commented:
“We are delighted that insurtech companies are playing a crucial role in redefining how insurance companies partner with their customers.
“The insurance industry is slowly waking up to the inevitability of change around it and start-ups are looking to facilitate, rather than hinder, change. The key will be working together.
“The insights from Startupbootcamp InsurTech and PwC’s report highlight the industry’s priorities and we are excited to see the new technology that is being developed. The findings are an opportunity for insurance start-ups to enable the industry to work with its customers in a tailored and efficient manner.”