While the new disruptive InsurTech companies were initially written off by carriers, citing woefully unprofitable combined ratios, they are trending positively and could soon see underwriting profits. Most recently, given the thousands of companies who have entered the market in the last five years, the focus is on partnerships in various forms. Incumbents are utilizing advanced data, analytics and technology capabilities in software and platform-as-a-service models to accelerate their own business and technology roadmaps.
The rules to building a successful business are conceptually simple - identify customer needs, build solutions to meet needs, distribute - repeat. This cycle has started getting shorter as customer needs rapidly evolve and the pace of change is accelerated by digital solutions, according to a report by Oliver Wyman colleagues Anosh Pardiwalla, Engagement Manager, Financial Services, Angat Sandhu, Partner, Head of Insurance, Asia Pacific and Leonard Li, Partner, Financial Services. Graham Harvey, Partner at Lippincott, also contributed to the report. Guy Carpenter is an affiliate of Oliver Wyman.
Leaders have started to anticipate customer needs, rapidly build and launch solutions and continuously modify these solutions for the next set of needs. This has meant building a ‘customer first’ mentality, adopting ‘digital’ by using data analytics to drive actionable insights and building the supporting technology and operational foundations to quickly react to market and behavioral changes.
Somewhere along the way, life insurance companies failed to keep up with the above changes. For many, the need for and immediacy of change wasn’t as high as business performance for the sector seemed stable and the threat of competition was quite low. Few players that did think about innovating around customer problems were burdened by legacy systems, poor data and internal resistance to change. Large scale digital transformation programs have seen only incremental improvements over the past few years and at the heart of it this is an industry with very complex products, long underwriting times, cumbersome claims processes and disengaged customers.
The issues in the life insurance industry are deep rooted and can’t be simply solved by digitizing the easiest steps in the customer journey or plugging existing products into digital ecosystems.
With the goal of providing education, knowledge transfer and to encourage the creation of commercial relationships in the InsurTech space, Guy Carpenter has launched GC Genesis, which currently supports two client capabilities: Fitting and the InsurTech Alliance, both of which are dedicated to helping (re)insurers understand, evaluate, utilize, partner with and underwrite new technologies. Fitting supports insurers in their evaluation of the thousands of InsurTech companies and their potential operational applications to accelerate business and technology initiatives. The InsurTech Alliance sponsors in-depth research of these digital technologies and structured review of targeted InsurTech companies.