What is this convergence likely to look like? And more importantly, what should insurers do to actively engage in convergence to position for success? If there is a single word that describes how convergence is playing out in the industry, that word is partnering. One way to look at the partnering opportunities to combine the best of the old with the best of the new is to consider strategies in five key areas.

Distribution: About 30 percent of all the InsurTech startups are in some way connected with the distribution space. These companies are born digital; often create an innovative customer experience; and leverage mobile, artificial intelligence, gamification, and other technologies. This is a prime area for partnering, and all of these new distribution firms are looking for insurer partners.
Risk: The rapidly expanding availability of data on perils, especially real-time data, offers new possibilities for improved risk selection and pricing. New predictive models and scores, more location-based data with greater levels of precision, and new real-time behavioral data all create differentiating opportunities for insurers. Much of this new capability is available through firms that could be great partners.
Product: Innovation is the name of the game with products. There are many InsurTech firms that are creating ideas for micro-insurance, usage-based insurance, behavior-based insurance, and parametric insurance. Many of the innovators are seeking insurers with underwriting capacity and a solid distribution network.
Customer service: New options are emerging for areas such as billing, claims, and other areas related to customer service. New and emerging technologies are especially relevant here, with drones, blockchain, mobile payments, AI, wearables, and other tech creating new options. Many of the InsurTech firms have innovative offerings in very specific areas and look for proof-of-concept and piloting opportunities with insurers.
Operations: Many tech companies, both incumbent and new firms, offer solutions to take operational efficiency to the next level. Robotic process automation and other AI techs lead the way, but other technologies offer improvements as well. Video streaming and smart glasses for claims can improve claim operations. Again, the companies that are creating these new solutions are eager to partner with insurers.

The future doesn't have to be a disaster scenario for the insurance industry. In fact, the potential is here for the industry to reach new levels of profitability and societal impact. Proactively partnering to leverage emerging technologies, new business models, innovative products, and new ways to reach customers can result in the best of both worlds for everyone, delivering new value to customers and growth for the industry.

Special Reports /

When worlds collide: Insurers and InsurTech

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