What is Insurtech? What are the effects of Insurtech?

Is Insurtech a nightmare like many says, or a cute toy like others say.

In this video, Dr. Robin Kiera shared his insights about what is important to know about #insurtech. Starting with the following players.

  1. The Incumbents where you have the good, the bad, and the ugly.
  2. The Insurtech Startups – and here, disruptors and enablers.
  3. The Reinsurers – maybe the Darth Vader of the #insurance industry.
  4. The Tech Companies – like Google, Facebook, Alibaba, Tencent, and Amazon. Maybe the hitman of the insurance industry of tomorrow.

Insurtech is more like to describe the current situation of the insurance industry. A lot of pressure coming in from the outside to #innovate, to produce #digital products, #services, and insurance products for the customers to excite them and help them on their daily lives.

For Insurtech Startups we have world-renowned names like Metromile, Oscar, Zhong-An, Friendsurance, Wefox, Ladderm InShared, Clover Health, NZI, Kasko, German Family Insurance, Trov, Root, Policygenius and a lot of others listed in the show notes (Inlsy and Deutsche Familienversicherung).

It is vital to know the certain nations leading in the insurtech movement far beyond than everybody in terms of the number of deals.

It’s the US, UK, Germany, Singapore, and India.

Who are the players in the Insurtech in the insurance industry?

1st. The Startups, it is also important to know that several years ago, billions of US dollars were invested on them. Even with varying numbers a lot of investors are betting on disrupting the insurance industry.

2nd. The Incumbents, even commonly perceived as dusty, slow, old and sadly from some, soon to be dead, Dr. Kiera underlined that there are a group of incumbents is not homogenous. Similar to sports leagues, some clubs will always be on top like Allianz, AXA, Generali, and other big insurers. 

And in every season we have positive surprises and we’re seeing small insurers using the opportunity of digital transformation and growing over the market average, investing a lot for restructuring their companies, product portfolio, and #IT capabilities.

Also same with sports leagues, we have negative surprises like gigantic sports clubs, to mention Hamburg Sports Club that will decline a lot.

3rd. The Reinsurers are insurers of the insurance industry. Similar might be but reinsurance is a totally different business model than direct insurance. Heavily B2B approach with few customers who don’t have an army or 10,000 agents and brokers that don’t approach the private end customers but instead they have a mass of highly trained and sophisticated workforce.

Taking from Dr. Kiera’s works, the reinsurers are very strategic about the future investing heavily for new upcoming players in the insurance market. Even with 100 years of experience as direct insurers, they strongly and heavily supporting insurtech startups and also tech companies and provide them with insurance for insurers.

The reinsurers are the wild cards and the big unknown on the table as per Dr. Kiera.

4th. The Tech Companies, Google, Facebook, Alibaba, Tencent, and Amazon. In this group, you can different strategies say,

For Google as Enabler providing #analytics tools and complex #algorithms for carriers that can be used to upload their customer #database into their cloud-based systems and to get a lot of insights out of it. But, no single #C-suits level insurance would upload their customer #data into a Google #Cloud.

Then we the Disruptors like Amazon, they’re setting up business units aiming to enter the insurance industry. Uber also tried to be a platform for insurance products. Special shout to Scott!

So what’s happening right now?

At first, there was a lot of panic for incumbents at the beginning when insurtech starups started to appear on years 2011, 2012, 2013, 2014.

But right now, we see a lot of consolidations, talks are calmer, and a lot of insurtech companies pivoting from attacker to enablers.

Why all this happening?

We really have an industry with high barriers to enter the market.  With the help of regulations, liberalizations, and internet expansion the barriers are now lowering. But a lot of insurance veterans at left behind with a mindset where regulators and bad technology actually saved them from new market players.

Regulators are not actually here to save incumbents neither the startups but more for customers as underlined by Dr. Frank Grund in this video  

Also, the internet allows you to start a company with a fraction of the cost compared to 10, 20, 30 40 years ago. 

So what will the future bring?

Dr. Robin Kiera “I don’t know. If I would know this, I would already reserve a private island and plan how could I make Hamburg Sports Club win the German Championship the first time since 1983.”

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