Fostering an open insurance revolution

InsurTechs are increasingly collaborating with IoT service providers to transform customer engagement. Incumbent insurers should nurture a similar mindset to create fruitful collaborations. (Photo: Adobe Stock)

The InsurTech carrier Lemonade recently launched a public API (Application Program Interface) platform powered by behavioral economics and artificial intelligence (AI) that allows any company to offer its policies through websites and native applications. With this API platform, the insurer offered developers access to its portfolio of condo, homeowners and renters insurance while expanding the API as it introduced newer products. The platform provided commerce applications, financial advisors, real estate applications, smart home products, and bots with the liberty to complement any offering with insurance, and offer customers instant coverage with a seamless purchasing experience without leaving the app or website.

This was not a one-off case: Lemonade simply emulated a successful digital operating model that was creating immense possibilities across sectors. The insurance industry, which has been traditionally slow in digitizing operations, is ripe for large-scale open innovation. The sector faces stiff competition from the global InsurTech market, which was valued at $2.72 billion in 2020, as well as tech disruptors such as Google and Amazon, both of which are eager to grab a piece of the pie.