Three in 10 insurers still not working with insurtechs: DI survey

March 12, 2021 11:23 AM

In the second tranche of research from Digital Insurance's insurtech survey, the industry is found to be in general agreement over which areas are the ripest targets for digital transformation. Breaking out the 121 respondents into insurer and insurtech representatives, DI finds that customer experience is the top priority for both sides of the coin. However, there is still some friction and unease between incumbents and insurgents.

Off the ground

About half of insurers categorize their innovation practices as "robust," with less than a quarter flying blind. The rest are in the middle, with some ad-hoc or siloed efforts. However, the industry has seen small pilots serve as proofs-of-concept for the entire company and drive more collaboration and innovation.

Howdy, partners?

It's no surprise that most insurers are, to some extent, seeking insurtech partners to work with. That nearly a third reporting that they aren't working with startups at all indicates that there's still plenty of room to grow for the insurtech sector -- as long as value can be demonstrated.

Room where it happens

Convincing insurers to take the plunge with a new offering continues to be challenging for startups. Insurtech respondents largely said that their conversations with insurers were positive, though they were equally split on whether those talks led to actual partnership or were still more sizzle than steak. However, only a tiny handful said that insurers simply didn't get it, indicating that when companies are getting in the door, they are able to speak insurers' languages better than at the outset of the insurtech wave.

Finding alignment

It's no surprise that insurers, coming out the pandemic, are focused on customer experience as a top priority. There's been well-documented acceleration in adoption of digital interaction, which happens to be where most insurtechs are operating as well.

In fact, the insurtech version of this chart largely mirrors the insurance side, with the only flip being between prioritization of claims and distribution. Both are heavily tied to customer experience, however, which may explain the slight variance. Notably on the insurtech side, 15% are looking to go direct to consumer with products on their own, effectively targeting all areas of the insurance value chain for disruption.

Output measurement

DI finds that among insurers, there's a healthy amount of output of new digital technologies. As ever, many of these have some crossover. However, these categories largely satisfied insurers' own definition of their initiatives, with no "others" to report.

Geospatial data way behind

The insurtech side was a different story. While there was a fair amount of crossover between insurers' major projects and insurtechs' common offerings, the outliers are interesting. First, geospatial data capabilities were not a common offering from respondents. There are several well-established insurtechs working on that technology, however, indicating a potential sample size issue.

More curious, though, is how many insurtechs didn't want to put their companies in the buckets that insurers were happy to put their initiatives into. Among the "other" responses for provided technologies: "AI powered digitization for handwritten forms," "RPA," "Blockchain," "Digital intelligence platform integrations," "Collaboration platform" and "market intelligence."

Nathan Golia

Editor-in-Chief, Digital Insurance