How a new wave of InsurTech collaboration is taking insurance into the future

As InsurTech continues to evolve, the opportunities for both startups and established insurers are increasing all the time.

Three years ago, there was a lot of hype about disruptive startups stealing customers. What’s actually materialised is ever closer collaboration between startups and insurers in areas ranging from customer experience to improved use of data. Hardly a day now goes by without news of an incumbent acquiring a startup to accelerate some aspect of the insurance value chain. So, what’s coming up on the horizon?

Breaking boundaries

PwC’s partnership with Startupbootcamp InsurTech, an accelerator programme for innovators, offers invaluable insights into emerging InsurTech trends.

Each year, startups compete for places on the three-month programme, which gives them an opportunity to test and refine their technology, learn from established entrepreneurs and work with leading companies within the industry. In a revealing indicator of the direction of innovation, over 60% of the thousand plus applications for the 2018 programme came from industries beyond insurance, including health, transport, agriculture, cyber security, wealth management and the sharing economy.

As PwC and Startupbootcamp explore in a new joint report, the surge in applications from beyond insurance highlights the extent to which adjacent industries have the insurance market in their sights on the one side and the opportunities for insurers to leverage ecosystems in search of greater consumer relevance on the other. This blurring of boundaries may even mean that the term InsurTech is now redundant and a new language of innovation is needed to describe these rapidly evolving ecosystems.  

A key focus of innovation is risk prevention, with 80% of the Startupbootcamp partners surveyed for the report seeing this as the future for insurance. Programme participants cited in the report include an AgriTech platform, which can help insurers to reduce crop damage risk through the use of integrated real-time data from ground sensors, aerial surveillance and satellite imagery. Other ventures range from the use of Internet of Things (IoT) technology to reduce property claims to developments in artificial intelligence to enable cardiac patients to monitor their hearts at home.

Capitalising on the potential

How can your business make the most of these developments? In previous posts, I’ve highlighted the importance of getting close to innovators and a culture that embraces experimentation. As the innovation potential moves beyond the confines of insurance, four further priorities emerge from our work with Startupbootcamp:

1/ Align strategy and innovation more closely

To maximise the return on investment in innovation, it’s important to bring it out of the fringes and into the heart of your business. Yet, many proofs of concept aren’t sufficiently aligned with the overall strategy of the enterprise. There’s also a lack of ownership from business units, with innovations being driven by satellite units. Ways to break down the barriers include running workshops with business teams to help identify their pain points and develop proofs of concept to address these.

2/ Think about the customer holistically

Innovation offers opportunities to be relevant to consumers beyond the traditional insurance value chain. Examples include connecting into the sensors and smart devices that are now increasingly common in the home and commercial properties. These developments can not only strengthen risk prevention and open up commercial opportunities in areas such as maintenance, but also create a closer and more enduring relationship with customers.

3/ Use InsurTech as an inroad into the sharing economy

While the shift away from ownership to borrowing across mobility, property and co-working is disrupting the traditional insurance model, it also opens up a huge and still largely untapped opportunities for insurers. An example cited in the report is the collaboration between an airport car sharing service and a pay-as-you-go insurer.

4/ Encourage more women to move to the forefront of innovation

Less than a quarter of the applications for the Startupbootcamp programme came from ventures that had female founders or co-founders. This reflects an industry-wide lack of women in tech-focused roles, which exacerbates the troubling shortage of digital talent. We at PwC are trying to combat these issues through initiatives such as TechSheCan and our new Women in Insurance Technology network. The network was launched in March 2018 as an industry-wide programme to empower future women leaders in insurance technology. The objectives are to attract the best talent into the insurance industry and technology, inspire a new generation to consider insurance and tech as a career choice and retain and advance female talents.  

Shot in the arm

InsurTech has already brought an influx of new technology, talent and ideas into the insurance industry. And as joint ventures begin to cut across industry boundaries, InsurTech is paving the way for new business models and fresh sources of growth. The businesses out in front not only recognise that insurance is itself ripe for innovation, but also that they’re ideally placed to take advantage of an increasingly open and connected commercial landscape.

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