Traditional insurers are increasingly aware that collaborating with InsurTech startups can create more business opportunities than threats, according to the recently-released Accenture report, “The Rise of InsurTech: How Young Startups and a Mature Industry Can Bring out the Best in One Another.”
Design is key
The report is part of Accenture’s larger Technology Vision for Insurance 2017 research and initiative, which evaluates the impact of five key trends that the Dublin-based global management consulting and professional services company believes will shape the future of the insurance industry: artificial intelligence, strategic partnerships, innovative talent acquisition, better all-around digital experiences, and the development of new tech-rooted businesses.
According to Accenture: “The biggest innovations in insurance over the next three years will not be in the technology tools themselves, but in how we design them with employees, customers, intermediaries and other human partners in mind.”
To that end, traditional insurers must learn how to effectively collaborate with InsurTech and other business solution startups. That task alone can be challenging, researchers note, because insurance industry incumbents have long been focused on the moves of traditional competitors, and because some insurers remain uncertain about what shape their innovation initiatives should even take.
For those insurance companies and executives who buy into the idea that they must forge ahead with technology, even if that means collaborating with nontraditional partners, here are three pivotal steps that Accenture believes can make those partnerships more meaningful.
For the promise of future growth, traditional insurers must learn how to effectively collaborate with InsurTech and other business solution startups. (Photo: iStock)
No. 3: Determine key business challenges before seeking tech solutions.
The idea here is not necessarily to partner with an InsurTech startup, or any technology agency for that matter, because its marketing is slick or its name is on the lips of industry leaders nationwide.
Related: 5 top insurance tech trends for 2017
Instead, insurance companies, agencies and brokerages should thoroughly evaluate their product supply chain, from prospecting to client management. Look for friction points, then find InsurTech companies that can specifically smooth over those problems using:
“If it sounds easy in theory, the reality is more challenging,” Accenture says in the report. “The ‘300 years versus 300 days’ culture conundrum is a big sticking point. InsurTech involves agile business approaches, coupled with a spirit of ‘try and see’ rather than ‘learn and do’. InsurTech culture does not truly understand the insurance culture.”
Industry watchers largely agree: There is a communications disconnect between the insurance industry and its customers. (Photo: iStock)
No. 2: Ensure all innovations are customer-centric.
Renaud Million, co-founder and CEO of the British insurance industry software firm SPIXII, said in the Accenture report that he was initially interested in the insurance space because he felt that the disconnect between providers and policyholders is palpable. “For me, it was clear that insurance products should start from the customer rather than from pre-existing processes,” Million says.
Erik Abrahamsson is founder and CEO of Digital Fineprint, a London company that turns ‘social data into insurance data.’ He once saw insurance as a last frontier of sorts, where previously off-line functions had not yet been moved online in the way they already have in hospitality (AirBnB) or transportation (Uber and Lyft).
“With just one in ten policies (globally) being sold online today,” Abrahamsson said in the Accenture report, “…we decided to move into insurance to help insurers make the transition.”
That old adage about apples and oranges comes to mind when one considers the prospect of bringing traditional insurers and InsurTech startups to the same table. (Photo: iStock)
No. 1: Persue ‘cross-cultural’ recruiting and understanding.
The business-cultural divide between traditional insurers and InsurTech startups has been a major impediment to innovation for the incumbents as well as growth for InsurTech startups. One possible solution: Businesses on both sides of that table need to begin to recruit employees and managers from the other side of the table.
According to Digital Fineprint’s Erik Abrahamsson: “Often it comes down to personal relations between young companies and the incumbents in the area, and finding win-win propositions that ultimately benefit the customer.”