The rise of Insurtech continues to dominate the insurance sector
A recent actuarial report has reported that almost 70% of life and non-life insurance firms operating today have been incorporated in the 21st century outnumbering their 20th century competitors by almost two to one. Additionally out of the 70%, almost two thirds were incorporated during the last 10 years with the average age of a UK insurance business now being 16 years old. In contrast the insurance sector has approximately 60 businesses that have been operating for over 100 years.
Overall the insurance market has experienced exponential growth driven largely by entrepreneurial and technology led innovation in an increasingly competitive market. Needless to say, Insurtech companies have enjoyed increased success forcing older insurers to transform themselves rapidly.
So called traditional Insurers are facing increased pressure to evolve and reinvent themselves finding new ways to engage with customers. The emergence of Insurtech only increases this disruption and incumbent insurers are now looking for opportunities to work collaboratively with them and treat the opportunity as more an opportunity than a threat.
As old meets new there will be significant challenges for how 21st century insurance firms can partner with older traditional insurers where there are significant differences in technology used and corporate culture. A change in mindset will be needed by both parties but with innovation the common goal, a change is surely achievable.
The world’s largest insurers also face continued need to comply with new regulation yet with this comes the opportunity to harness new technology in partnership with Insurtech firms.
Insurtech brings with it the next wave of technical innovation, directing the industry towards more customer centric and cloud based with new, faster more accessible consumer communication channels. This trend is also being driven by massive investment, with Deloitte estimating that around £8 billion has been invested over the past 5 years.
Insurtech has benefited from the influence of the latest technologies such as mobile and apps, smart contracts, AI and Blockchain to name a few. These innovations have significant potential benefits for customers. What remains to be seen is can traditional insurers harness these technologies and keep up new trends and changing customer demand.