Insurtech : everyone after a piece of the action

With the worldwide insurance market worth nearly £4trillion, and £2.1billion invested in insurtech last year alone, it’s not surprising that there’s a feeding frenzy going on among service providers. Because, as the latest Future of Insurance publication from Raconteur clearly reveals, everything is up for grabs.

Right across the value chain, from law firms and big data specialists, to Silicon Valley entrepreneurs and fintech pathfinders, there is no shortage of hungry businesses ready and able to move into the insurance space – a fact clearly reflected in the advertisements in the Raconteur paper. Our analysis of its contents (see graphic above) reveals the wide range of players and the main areas of focus for insurtech. Consultancy services, software solutions and customer experience dominate, with a large number of new entrants and technology providers highlighting their skills as risk managers and data specialists. All are poised to disrupt the industry in the same way that fintech transformed banking.

Getting to know you – how RDT uses data to build customer relationships

Most important attributes of customer experience compared with performance

Research from Accenture shows that 30 per cent of customers have a negative view of their insurance providers. The figure was quoted in a feature* in Raconteur’s ‘Future of Insurance’ supplement, distributed last month with The Times, and underlines the need for insurers to find out as much as possible about their customers so they can provide a more personal service. 

The feature included a table compiled by KPMG of the most important attributes of customer experience compared with performance. This revealed that insurers are well behind digital exemplars such as Amazon and Google, and must become far more adept at extracting value from the huge amount of data available to financial services providers.

Accessibility, tailoring products and polices to customer needs, and more online access were listed as priorities to improve customer experience. While cost still remains the number one reason for closing or replacing a policy, customers cite poor communication and lack of speed, from quote through to renewals and claims, as the next major bugbear. And when it comes to communication, digital is clearly the preferred channel.

Redefining tomorrow: RDT and the future of insurance

The rise of insurtech is reflected in the amount of column inches devoted to new technology and its power to transform one of our most conservative industries. Not known for innovation, insurance is slow moving, labour intensive, bound by tradition and convention. But if the current media focus on disruption is anything to go by, insurance is on the threshold of big changes and is ready to embrace a digital future.

But who will help to make this happen, and how will insurers stay ahead of the growing wave of technology startups and challenger brands? The debate was joined in last month’s Raconteur Insurance supplement*, distributed with The Times, which provided a snapshot of the issues and players in a changing industry. In this article we comment on some of the trends covered in the supplement, and provide RDT’s vision for the future.

A key theme of the editorial was that although there is a wealth of data available, both structured and unstructured, and a host of digital resources and analytical tools that promise to turn straw into gold, insurers are struggling to find their way – a fact underlined by recent PwC research that found that while 74 per cent of insurers believe their business is at risk of disruption, 32 per cent are not yet engaging with technology firms on any level.