The world of insurance is changing. Now, new research from Capgemini and Efma reveals why InsurTech and incumbents may want to work together more in the future.
The French consultancy and the retail financial services network’s new report is named World InsurTech Report 2019. It takes a deep dive into where the InsurTech industry is right now and where it may go in the future.
The report is based on insights from surveys and interviews with traditional insurance companies and with InsurTech firms from 75 executives across 20 markets in north and south America, Asia, Africa and Europe.
The report kicks off by stating that there is no way of going back to how things were. Innovations in the internet of things space has transformed customer interactions to the core. People are constantly connected, switched on and tracked thanks to their smart watches, smart phones and smart speakers, just to mention a few gizmos and gadgets.
This paradigm shift has changed things for insurers who now have to become more flexible and have more add-ons to better cater to their clients’ changing desires.
For instance, 52% of customers want to conduct their insurance interactions and transactions via digital channels like websites or apps.
Moreover, the Capgemini and Efma researchers also found that that consumers are more switched on these days to how covered they really are, meaning insurers have to work extra hard to meet their demands.
There is also scope for new business models to enter the insurance space with 41% of customers saying they would consider usage-based insurance.
Unsurprisingly, both new InsurTech and incumbent insurers are already delving into a mixture of these models, including usage, on-demand and parametric-based insurance.
Insurers can also no longer ignore the presence of big tech firms like Google, Alibaba and Apple who have all entered the financial services sector for years. For instance, the report points at how Alibaba is already offering a health insurance product.
Given how the space is changing, it is hardly surprising that the Capgemini and Efma report lands in the conclusion that incumbent insurers and InsurTech startups should collaborate more. The report points out that new ventures’ unique capabilities and agility makes them ideal partners for incumbents who want to take a bigger slice out of the transforming marketplace.
Capgemini and Efma believe that incumbents and new starters can face the challenges of ensuring organizational readiness and data security.
But to be successful, insurance industry players must prioritize digital agility, build an integrated ecosystem and establish innovative “competencies that contribute to the successful development of tomorrow’s marketplace.”
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