More technology companies are flooding into the (re)insurance market, so how can insurers respond?
Google is perceived by insurers as their biggest single competitive threat, found a recent survey.
The next biggest threats are tech-manufacturers – such as those developing driverless cars – and then Amazon, found the survey by Capgemini and financial services association Efma.
But just how real are these threats?
Retailers and technology companies are already using their consumer insights and innovative business models to enter the insurance space. For example, Amazon uses its customer information and insights to offer customised life insurance. Walmart and Ikea have also started writing insurance.
Start-up insurers and non-insurers, meanwhile, are using technology, big data and analytics to deliver innovative risk transfer products that meet consumers’ changing needs.
Unencumbered by large legacy systems and traditional ways of working, technology start-ups and FinTech firms are growing. In 2015 investors funded insurance tech start-ups to the tune of $2.6bn in 2015, according to research company CB Insights – three and a half times the 2014 figure.
Chinese start-up Zhong An, which is backed by Alibaba and Ping An, among others, is an on-line-only personal lines insurer that aims to digitalise insurance.
More innovative concepts include Guevara, a peer-to-peer motor intermediary that enables drivers to choose a pool to share their risk with.
Along similar lines, a New York-based start-up peer-to-peer insurer – which has reinsurance backing from Lloyd’s and Berkshire Hathaway – is intended to disrupt the traditional insurance model.
New entrants to the (re)insurance industry should not necessarily be seen as a business threat, however.
Many new technology solutions might be developed by start-ups, but then acquired by insurers. Close collaboration is likely to be mutually beneficial to both new and established (re)insurance companies in the future. JLT Re has been building relationships with technology companies and bringing them together with (re)insurers.
There are many opportunities for (re)insurers to tap into the technology space and, ultimately, use it for the benefit of themselves and their clients.
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For more information, please contact Gregg Holtmeier, Head of Western Region in North America on +1 415-930-9077 or email firstname.lastname@example.org