By now, you might be getting tired of hearing the term Insurtech. You may also be annoyed at everyone telling you about industry disruption. But there is no question that there is a high level of buzz, excitement, investment and activity in the insurtech space. The question is – does it really matter? Or is this just a phase that will fade away?
At SMA, we believe that insurtech definitely does matter. However, the implications are vastly different by industry segment and for different parts of the insurance business. Sorting out what it means for your little (or big) corner of the insurance industry can be daunting. But you must, whether you are an insurer looking for investment or partnering opportunities, an incumbent tech company assessing new competition or new partners, an insurtech company seeking success or an investor trying to gauge where to focus.
See also: InsurTech Need Not Be a Zero-Sum Game
You need to create short lists of the insurtech companies most relevant to your particular situation in specific domains. This is imperative, given that there are now well over 500 insurtech companies, and that number is growing every day. Did you know that there are well over 100 companies focused on disrupting distribution alone? Or that approximately 10% of the companies are specifically focused on new solutions or models for the claims ecosystem?
You might believe that these companies don’t really understand insurance and are destined to fail. That will certainly be the case for many. Some have already fallen by the wayside. But making the assumption that it doesn’t really matter to your business would be a serious mistake. The insurtech companies that are successful are bound to make an impact, and no part of the industry is immune to the potential implications of the insurtech movement. Every company, regardless of size or market position, must take a proactive approach to assessing insurtech to understand the both the competitive threats and the opportunities to offer new products and services, improve operations, or even introduce brand new business models.
See also: Matching Game for InsurTech, Insurers
Does insurtech matter? History will be the judge, but all the signs point to an industry on the verge of disruption, and the many insurtech companies are bound to play a major role in industry transformation.
More information on the new research report, The InsurTech Universe: Understanding Company Positioning and Maturity, is available at this link.