The COO of the British insurer Aon is feeling bullish about the continuous growth of the InsurTech sector despite the coronavirus’ impact on the economy. In fact, he believes the pandemic could actually help the sector grow.
John G. Bruno made his case for his beliefs in a new blog post, arguing that the Covid-19 crisis has showcased that there are many under-insured risks that insurers have to consider.
Pointing at a recent survey from Aon, he said that Covid-19 is not the only risk businesses worry about and that are currently left uninsured.
“It’s become clear that new technologies – and specifically, advances in digitalisation – represent the obvious launch pad for innovative solutions that will help our clients better manage risk and close the protection gap,” Bruno wrote.
At the same time many people expect funding into FinTech, InsurTech and other tech sectors to dry up as investors become more hesitant to back untested startups.
“While we expect a short-term impact on funding while investors wait for greater certainty, I don’t anticipate that Covid-19 will impact the macro growth trend for InsurTech,” Bruno said. “VC companies are drawing their credit lines down because they want the startups they’re invested in to have sufficient cash to continue ‘inventing’ through the crisis. Importantly, they recognise that the crisis can potentially stimulate innovation that increases resilience and promotes recovery.”
He noted that, following the crisis, businesses around the world will look to reinvent themselves in order to become more resilient.
“Retailers large and small as well as healthcare businesses are activating workers who are not covered by medical insurance; more gig workers are being hired by businesses to meet their delivery needs: supply chains must be made more flexible and more tech-enabled,” Bruno said.
Even though he is certain that Covid-19 will have an effect on the economy, he predicted that it will also work as a catalyst for more innovation and that Aon is already looking for startups that can help it get on top of the next step of their businesses.
“The global pandemic crisis is going to trigger another digital pivot – one that will see the InsurTech space attracting renewed VC and CVC investment flows,” he said. “The resulting solutions will help resolve the many dislocations created by the Covid-19 outbreak and will ultimately re-imagine how consumers and businesses interact with risk transfer solutions.”
He is not the only one to have made assessment. Several industry stakeholders FinTech Global has talked with over the past few months believe that InsurTech startups could come out as the big winners in the aftermath of the pandemic. The common reason for this assertion is, much like Bruno suggested, that the crisis has laid bare the limitations of traditional insurance infrastructures, highlighting the need for innovation.
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