Customers increasingly expect insurance carriers to resemble Uber, Google and Amazon. Insurtech now plays a key role in making those expectations reality, according to Strategy Meets Action Partner Mark Breading.
“Insurtech has come out of nowhere and it’s astounding,” says Breading. “When I first attended insurtech conferences, there were roughly 125 people all from the tech startups. Now it’s mainstream insurance executives.”
Breading is tracking about 500 insurance technology companies, he told a room of industry professionals at INN’s Women in Insurance Leadership Conference in Chicago last week. Though it's likely that up to 90% of these will end up failing, the other 10% will be successful, earn investments from venture capitalists and form coveted partnerships with insurers.
According to SMA research, fewer insurance companies feel they have a strong handle on emerging tech, down to six percent from 13% in 2015. Carriers are responding by creating new roles—such as chief data officer, chief data scientist and chief analytics officer—and by completing core systems replacements, Breading said.
Bridging the gap to the future requires organizations to create a work culture where it is okay to fail and has an emphasis on going digital, he added. Breading predicts cybersecurity is one insurtech sector poised to lead the pack.
“Cyber risk is going to go through the roof,” he said. “Today, we think about cyber risk as something separate. For personal, commercial lines and life, the question is how to embed it into everything [products].”
