The Perils and Promise of Insurtechs
Funding is up for insurtechs, but the number of new entrants is declining.
Insurtechs have attracted the attention of insurers, with some insurers content simply to observe.
Insurtechs typically fall into one of three categories: distribution, risk-bearing carriers or focused service providers filling holes in the value chain.
For some insurers, working with insurtechs allows them to pursue innovation without disrupting core operations.
Among the largest insurers, building a stake in the insurtech movement takes various forms, including direct investment, acquisition and supporting tech accelerators.
Reinsurers are finding new routes to the customer, both through primary clients and by creating alternative brands.
Because of their legacy and sheer size, most insurers' cultures make it difficult to act with agility. The nimble, focused nature of insurtechs can help insurers' respond.
Faced with a new work environment and changed customer expectations, insurers have looked to insurtechs for capabilities such as large-scale text messaging and distributed document management.
For many insurers, the most important takeaway from dealing with insurers is exposure to faster-moving, adaptive cultures that embrace, rather than reject, change.
For many insurers, it's easier to authorize a larger investment in an insurtech than it is to integrate its technology.