Other parts of this series:
Rather than viewing emerging insurtechs as threats, insurers are increasingly seeing economic opportunity with exciting startups. Strategic partnering with new players can yield benefits and challenges for traditional insurers.
Accenture’s recent report, The Rise of Insurtech, offers key insights and the latest thinking on how insurers are exploring opportunities presented by these disruptive new entrants onto the insurance landscape. In my last blog post in this series, I discussed the steady growth in insurtech investment in recent years and noted indicators that its rise is now a global trend. You can register to read it here.
Our research indicates that, rather than viewing these emerging players as threats, innovative insurers recognize exciting new opportunities to work with insurtech startups to reach into new markets. With their expertise in emerging technologies, such as artificial intelligence (AI), the Internet of Things (IoT), blockchain, big data and analytics, insurtechs represent potential solutions for the kinds of challenges insurers are facing in this increasingly digitized and competitive space. The challenge lies in how to best take advantage of the opportunity.
With their digital expertise, insurtechs can help insurers leverage emerging and cutting-edge technologies to reach their customers where they are—online, mobile, and 24/7. There is also a cultural benefit to traditional insurers partnering with smaller startups that may be even more valuable in the long run. Startup culture generally eschews hierarchical, bureaucratic structure in favor of innovation and collaboration and may point the way forward for incumbent insurers to foster a top-down culture of innovation across their companies.
The very factors that make insurtechs such exciting players on the insurance scene—agility, creativity, risk-taking—can potentially make for a challenging culture “fit” with traditional insurers. Insurance has been assumed to be slower to innovate across all levels of the enterprise and can be, by its very nature, a risk-averse industry. But Accenture research reveals that many conventional insurers have more in common culturally with startups than they have differences. Successful, smart partnerships between cultures can be mutually beneficial, if approached strategically.
While insurtechs bring significant advantages to the table, traditional insurers don’t arrive empty-handed either. What they may lack in technological innovation and hyper-agility, they make up for with deep institutional knowledge of the complicated insurance sector. They know common pitfalls and industry challenges and have experience navigating the complicated set of regulations that govern the sector. Our research also shows that cultural differences are not necessarily company-wide. Staff at large institutions tend to be aligned along similar values as employees of non-traditional startups, especially when it comes to entrepreneurship.
My next blog post will explore some interesting examples of insurtechs that have recently emerged and the specific digital technologies they are leveraging to set themselves apart.
You may also enjoy David-Goliath Culture Gaps: Accenture Strategy 2017