In part one of our 'How InsurTech is reshaping insurance' series, our Sales Associate, Andrew Fletcher breaks down the three reasons to collaborate with an InsurTech.
In recent years, centuries-old norms and traditional approaches to insurance have been challenged by fundamental changes to our economy and society caused by widespread digitalisation. As our CEO, Andy Yeoman, discussed recently in Insurance Day, disruption to everyday tasks caused by the COVID-19 pandemic has only accelerated the pressure on companies to fast-track digital transformation. In this regard, adopting new strategies centred on digital solutions not only facilitates more efficient and accurate underwriting techniques, it will also become a core part of Insurers’ resilience and business continuity plans.
With concepts like ‘digitalisation’ and ‘innovation’ dominating conversations across the industry, it can be easy to forget that radical business transformation is not an inevitable force of nature; it is a process that requires a great deal of investment and human capital. Where Insurers once asked if they should adopt a technology-led approach, they now ask, what is the best route to achieving this digital nirvana?
Insurers are faced with two paths: pull together the resources necessary to develop their own digital solutions, or partner with a technology provider to adopt a third-party solution. While some Insurers have taken steps towards developing digital underwriting capabilities in-house, others have aligned with London’s booming InsurTech scene. With digital innovation embedded in their DNA, the services InsurTech’s provide can be invaluable when implementing an ambitious digitalisation strategy.
While there is no one-size-fits-all solution to the digitalisation challenges Insurers face, there are several reasons organisations choose to form long-term partnerships with InsurTech’s. This series highlights a few of the advantages for Insurers in taking a collaborative approach to leading the digital arms race taking place across the industry. This article covers 3 of the key strengths that InsurTech’s bring to the table. In the coming weeks we will take a look behind the scenes at how companies like Concirrus have assembled an array of expertise to build scalable solutions, the benefits of which are much greater than the sum of their parts.
1. Years of investment in technology and innovation
As mentioned, creating digital insurance solutions necessitates heavy investment, both in terms of capital and of time. Even the most intuitive, straightforward solutions on the market are the result of years of research, painstaking engineering and data science created by teams of experts. Our insurance intelligence platform, Quest, is a result of 7 years of investment in building algorithms capable of processing billions of rows of data spanning dozens of dynamic risk factors. There are no shortcuts to be had when it comes to creating effective digitalisation solutions. By finding an InsurTech that shares your company values and attitudes towards the role of digitalisation, Insurers can avoid the need to invest millions of dollars and thousands of man hours in developing these tools in-house. Adopting an outsourced InsurTech solution gives them a head start in the race to become digital champions in the insurance industry.
2. Agile and ready to scale
Every Insurer has unique priorities, goals, and attitudes towards their digital future, which can deter them from adopting third-party ‘out-of-the-box’ digital underwriting solutions. However, successful InsurTech’s celebrate the unique perspective of the Insurers they work with. With less complex team structures and agile development cycles, InsurTech’s are often well positioned to deploy digital solutions quickly. Through close relationships, challenges from across the industry can be shared, understood, and pooled to shape research and development, ensuring innovation is market-led. The on-going collective input of market leaders means feature sets are continually optimised to meet market needs as they evolve. For Concirrus, this ethos is reflected in everything we do, from developing our product roadmap around our partners’ needs to making it as easy as possible to integrate our functionality with an Insurer’s existing systems.
3. Breadth of expertise
As the Internet of Things (IoT) market has grown significantly in recent years, so too has the amount of data available, and the task of processing it far exceeds the existing skills and infrastructure of many Insurers. This is where the burden of human capital sets in for Insurers who want to create effective digital solutions. The technological disciplines needed to create world-leading digital insurance solutions means that those Insurers that choose to develop their own solutions are faced with the challenge of radically changing the skillsets that currently exist within their organisation. This process of recruitment and upskilling requires no small amount of capital expenditure.
InsurTech companies, on the other hand, are created specifically to bridge the gap between insurance and technology, and the demography of their workforce reflects this. Within an InsurTech, it’s not uncommon for underwriting veterans to rub shoulders with expert Product Designers and Engineers to create tailored solutions based on models devised by some of the world’s top Data Scientists. By combining this diverse range of expertise, InsurTech’s can build solutions that are both technically outstanding, fit for purpose and designed to deliver ongoing value.
Every Insurer is faced with the same questions as we enter the 2020s. How can a centuries-old industry adapt to an economy that has shifted into the digital domain at a breakneck pace? How can Insurers utilise this process of digitalisation to create best in class offerings before their competitors, and at a lower cost? InsurTech solution providers can help Insurers formulate a clear strategy and roadmap to help Insurers realise their future potential in an increasingly competitive market. We look forward to sharing more information about our diverse, hard-working team and industry leading digital insurance platform over the course of the next few weeks. Subscribe below to be notified about other blogs within this series.