Large insurance incumbents are not agile enough to build out top-notch user experiences without the help of insurtech startups, according to Andrew Rear, chief executive of Munich Re Digital Partners.

“Agility is dependent on size. Big companies cannot be agile and should know they will fail,” Rear told a room of industry peers Tuesday at Celent’s 2017 Innovation & Insight day in Boston.

There are two answers to insurtech disruption: build capabilities in-house or partner with industry newcomers with an option to buy at a later date. The latter submits all user experience control to insurtech startups, Rear says. However, it is a risk Munich Re feels it has to take.

Andrew Rear, Munich Re Digital Partners chief executive, addresses audience at Celent Insight & Innovation Day.
Andrew Rear, Munich Re Digital Partners chief executive, addresses audience at Celent Insight & Innovation Day. Celent

The reinsurer launched its Digital Partners business unit in May 2016. Digital Partners currently works with eight startups and intends to grow partnerships by at least 10 each year. It sports a team of just over 20 employees.

In many ways, Munich Re and the industry as a whole is working to make the insurance more like the rest of the Internet, Rear says. Most consumer-facing websites do not ask customers for basic information they can easily scrape of Facebook profiles. They are also mobile-first and include some sort of chat function.

“At best consumers’ happiness with our user experience is satisfactory,” he said, adding the value insurtech partners bring to Munich Re is an expertise in mobile and social media. “We don’t have a UX guy so we value them for building our front-end distribution layer.”

In return, Munich Re offers startups capital, product design capabilities, and global multiline capacity—the ability to expand businesses across state and country borders.

“At some point startups will want an exit and we will think about whether we will be their exit,” he says. “The possibility is there for us to run them as stand-alone businesses we don’t have to assimilate.”