Prescient insurers are:

Exploring and discovering – Savvy incumbents are actively monitoring new trends and innovations. Some of them are even investing in operations in innovation hotspots (e.g., Silicon Valley) where they can learn about the latest developments directly and in real time.

Action item: Plan an InsurTech immersion session for senior management. This should be an effective eye-opener and facilitate sharing of relevant insights on desired InsurTech solutions. Subsequently, FinTech analyst platforms can keep management up-to-date on the latest developments and market entrants.

Partnering to develop solutions – Exploration should lead to the development of potential use cases that address specific business challenges. Incumbents can partner with startups to build pilots to test in the market.

Action item: Select a few key business challenges, identify possible solutions, and find potential partners. A design environment ("sandbox") will help boost creativity and also provide tools and resources for designing and fast prototyping potential solutions. This approach also can help establish the baseline and approach to building future InsurTech solutions.

Contributing to InsurTech's growth and development – Venture capital and incubator programs play an important role strategically directing key innovation efforts. Established insurers can play an active role by providing industry knowledge and resources to develop appropriate solutions.

Action item: Define a strategy to direct start-ups' focus on specific problems, especially those that otherwise might not be addressed in the short term. Incumbents should consider startup programs such as incubators, mechanisms to fund companies, and strategic acquisitions.

Developing new products and services –Being active in InsurTech can help incumbents discover emerging coverage needs and risks that require new insurance products and services. Accordingly, they can refine — and even redefine — product portfolio strategy. This will result in the design of new risk models tailored to underserved and emerging markets.

Action item: Take a close look at emerging technologies in order to define a promising product strategy, determine required capabilities, and create a plan to build a portfolio and seize market opportunities.

Special Reports /

InsurTech: A challenge to and opportunity for insurers

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