InsurTech Trend Report: Beyond the boundaries of insurance
18 July 2018
We’re now in our third year of working with Startupbootcamp InsurTech, and we’re seeing InsurTech mature and become an increasingly important part of the insurance industry. Last year we predicted increased collaboration between insurers and startups, with boundaries continuing to blur as startups bring new technology and data into the mix. Is it living up to this prediction? We think so.
Our report produced together with Startupbootcamp gives insight into the InsurTech sector based on over 1000 applications to the accelerator programme, analysis of the 226 startups that made it to final application stages, and our position at the heart of the InsurTech agenda.
InsurTech has matured to the stage where insurers have moved beyond ‘watch and learn’ – many are now scaling proof of concepts with startups. InsurTech is moving beyond the boundaries of insurance, giving insurers access to new skills and data from adjacent industries, and new revenue streams through innovative products and services.
Our key findings include:
- Insurers are collaborating with startups from adjacent industries – such as agriculture, aircraft manufacturing, health, cyber-security, maritime and general transport. This new approach gives insurers the opportunity to access new revenue streams, for example to invest more energy in preventing damages happening before a claim needs to be made. 80% of SBC partners surveyed believe the future of insurance is prevention.
- Startups can provide access to new data sources or offer new ways to drive value from data: Artificial Intelligence is the primary technology for 41% of SBC applicants. With powerful algorithms, they have the potential to give insurers access to insights from their vast amounts of data. The clear challenge is how startups will work with the insurers’ existing technology. Rather than attempt to build cumbersome links with old systems, some insurers are taking the approach of setting up completely new technology infrastructure, allowing for easy integration of third party plug-ins.
- Insurers and startups are increasingly looking at new products: 84% of SBC partners said they are interested in finding an innovative solution in cyber, and 80% are interested in business models linked to trends attached to the sharing economy.
- Innovation has moved beyond just watch and learn: Insurers are now exploring how to scale proof of concepts into their broader businesses.
- Gender diversity is improving – but still has a long way to go: 23% of applications to Startupbootcamp this year had female founders and co-founders. However, application data shows that men are still five times more likely to hold a Chief Technology Officer position, whilst women are twice as likely to be Chief Marketing Officers.
- Disruption is still coming: although startups are increasingly looking to partner rather than disrupt, threats will come from tech giants, telecoms and other industries. Beyond these threats, startups have the potential to scale and collaborate to own the entire value chain – first moving reinsurers are already in pole position to provide the capacity.