For 50-odd years, the way insurance has worked has remained the same. But in the last few years, catalysed by the pandemic, the rise of digital solutions and insurtech looks to break down historical insurance preconceptions have emerged.
With this series previously delving into the innovative use of artificial intelligence (AI) within the digital insurance industry, including a view of what future developments might entail, here The Fintech Times is joined by industry leaders to subsequently develop this narrative with a view of current collaborations taking ahold of insurtech.
And what better way to commence this exciting new focus than to discuss the most impactful industry collaborations of the last decade?
Here Tarci, EIS, LexisNexis, Bold Penguin and Insly, provide a fascinating insight into how the industry is evolving through the power of coming together.
A problem shared
Leetal Gruper, co-founder and CEO, Tarci
Beginning as we mean to go on, Leetal Gruper, the co-founder and CEO of the data intelligence engine Tarci, opens the discussion with three strong opinions on the most impactful insurtech collaborations of the last 10 years.
In this, Gruper cites three leading examples of the power of collaboration in action.
Lemonade and AIG: In 2016, AIG partnered with Lemonade, a peer-to-peer insurance company, to bring a new home insurance product to market. This collaboration helped AIG to tap into the growing insurtech market and gave Lemonade access to AIG’s vast resources and expertise.
Allstate and Google: In 2017, Allstate and Google announced a partnership to bring Google’s machine learning and artificial intelligence capabilities to Allstate’s drivewise programme, which tracks and rewards safe driving habits. The partnership has allowed Allstate to improve the accuracy of its risk assessment and pricing, as well as to offer more personalized and targeted products to its customers.
MetLife and Alibaba: In 2018, MetLife and Alibaba announced a strategic partnership to offer insurance products to Alibaba’s customers in China. The partnership has allowed MetLife to tap into Alibaba’s massive customer base and has given Alibaba the opportunity to offer insurance products to its customers.
Highly dependent?
With these examples, Gruper explains that collaboration is likely to continue to be “an important part of the insurtech industry, as it allows companies to leverage each other’s strengths and resources to bring innovative products and services to market.”
Regarding the relationship between big tech companies and the insurance industry, she recognises them as “a complex one.”
“On the one hand, big tech companies have the resources and expertise to bring innovative products and services to the insurance market, which can benefit consumers,” comments Gruper, developing her argument.
“On the other hand, some insurance companies may view big tech companies as a threat to their business, as they have the potential to disrupt traditional insurance models,” she continues. “Ultimately, the relationship between big tech and the insurance industry will depend on the specific circumstances and motivations of each party.”
Customer at heart
Rory Yates, SVP corporate strategy, global, EIS
Developing the conversation, Rory Yates, SVP of corporate strategy, global, at the digital insurance platform EIS, takes a more holistic view of insurtech partnership activity throughout the last decade.
Yates sees the domino effect such activity continues to have on the customer experience, stating: “The major advances have been in business process benefits that have, in turn, led to better, more consistent customer experiences.”
“Specifically, advances in health, where insurance services have been built around improving outcomes and not just insuring the risk,” he continues.
“More recently, insurtech has helped insurers deal with the proliferation of distribution, move to embedded insurance – an area of continued consistent growth – and dramatically improve employee experiences by processing erroneous tasks, supporting the accuracy of human tasks, and allowing them to focus on the higher value areas of their roles.
“The key to this is the collaboration between core-tech providers enabling insurers’ ecosystems and the insurtech marketplace,” concludes Yates.
Ones to watch
Martyn Mathews, senior director, personal and commercial lines, LexisNexis Risk Solutions, Insurance, UK and Ireland
Martyn Mathews, senior director of personal and commercial lines for LexisNexis Risk Solutions, Insurance, UK and Ireland, picks up on recent activity between Zego and QBE, FloodFlash and Munich Re Innovation and Ondo and Admiral as a few of his favourite examples.
These examples, he states, have “sparked a great deal of interest in the market,” before adding “there are still many more to be watching.”
The US insurance company Lemonade is having a good day, as like his predecessor, Mathews cites the company’s activity, and specifically its recent partnership with Aviva, as another key example.
“The very recent news that Aviva has formed a strategic partnership with Lemonade proves insurance providers have the hunger to maximise new technologies and partnerships with insurtechs to make customers’ lives easier, particularly at the point of claim,” he explains.
“Collaboration looks to be very much a cornerstone in the future of insurtech,” Mathews recognises, before adding, “It might be too soon to gauge what has been the most revolutionary and impactful – 10 years is not a long time in insurance.”
Foundational collaborations and digital distribution
Chris Kessler, vice president of corporate development, Bold Penguin
While admitting difficulty in pinpointing the ‘most revolutionary’ collaboration, Chris Kessler, vice president of corporate development of the small commercial insurance platform Bold Penguin, certainly favours the activity witnessed between carriers and insurtechs, and the resulting benefits around policy administration and distribution.
Ratifying his statement, Kessler thinks back to the investments that carriers made into policy administration platforms and digital distribution capabilities in the form of large-scale, transformational programmes; which made headlines 10+ years ago.
“This kicked off between carriers and policy administration tech companies like Guidewire, Duck Creek and Majesco,” he comments.
Describing these collaborations as “foundational,” Kessler, above all, explains how this activity “empowered carriers to pioneer and gain share in digital distribution, the fastest growing channel in property and casualty.”
“Then came digital distribution company-focused businesses, like Bold Penguin, to bring applications, quotes, and digitally-bound policies across channels – delivering a simplified, digital, and transparent experience,” concludes Kessler.
Most innovative = best collaboration
Rounding off our conversation, for now, Risto Rossar, founder and CEO of the insurtech Insly, sees that “nearly all successful insurtechs have been created in collaboration with insurance companies,” with perhaps the exception of full-stack insurtechs, such as Lemonade and Element in Germany, that have cultivated a completely new digital business model.
Expanding upon this statement, Rossar explains that at a high level, “there are two types of collaboration,” with the first being where “insurtechs provide technology to insurance companies to help them to innovate.”
The second, Rossar states, is when “insurtechs are providing new ways to distribute products, by combining technology with sales and bundling products into a more innovative package.”
“So, bearing that in mind, whichever insurtech you think is the most innovative is probably also the best collaboration,” concludes Rossar.
The post A Decade of Impactful Insurtech Collaborations With Tarci, EIS, LexisNexis, Bold Penguin and Insly appeared first on The Fintech Times.
