Other parts of this series:
- Day 1 of InsureTech Connect 2017: The changing nature of risk, customer engagement and cost reduction
- Day 2 of InsureTech Connect 2017: IoT, AI and Innovation
- InsureTech Connect 2017: Insurers and insurtechs need each other
- Define partnerships, scale adoption, rethink operating models: Thoughts from InsureTech Connect 2017
Michael Costonis reflects on the big-picture ideas from Insuretech Connect: what insurers need for successful partnerships and what the biggest stumbling block is.
Last week, I joined many of my Accenture Insurance colleagues at InsureTech Connect for two days of presentations and conversations about insurance, insurtech and their intersection. In this blog post, I’d like to look at some of the opportunities and challenges that were discussed at the conference.
How can insurers and insurtechs work together?
The saying goes, if you fail to plan, you plan to fail. For insurers and insurtechs to work together successfully, they must define the partnership model and how the technology will be employed. Will insurers use insurtech capabilities to enhance their own business? Or are they considering investments that need to generate a financial return? Secondly, established insurers must increasingly expect that insurtech players will occupy parts of their value chain, and that these players will behave differently from traditional service providers within the market.
In addition, to take advantage of a partnership, insurers must consider two pieces: technology readiness, and governance and process readiness. The technology piece is relatively straightforward. Insurers must position themselves into a more flexible, open and agile configuration, and assess to what degree their existing systems and processes can work effectively with new technology.
However, the bigger, more profound question is whether an insurance company is willing, ready and able to change the way it operates in order to make best and greatest use of insurtech innovation. For example, using drones for claims adjustments means that adjusters perform fewer on-site inspections; instead, pilots fly drones and adjusters look at the resulting images. It requires a reconfiguration of the entire claims function.
How can insurers create win-win relationships with insurtechs?
Successful partnerships require insurers and insurtechs to forge win-win relationships. For insurers, that means understanding the world of potential partners, and having an eyes-wide-open partnership model that acknowledges where insurtechs make money. Similarly, insurtechs must understand how to drive value for insurance companies. When these incentives align, it becomes much easier to forge an effective partnership that yields results.
What is the single biggest stumbling block to insurtechs’ success?
There’s lots of potential in insurtech, but its success depends on adoption and scalability. For incumbent insurers in particular, it means getting insurtech projects out of a perpetual proof-of-concept stage. If we can crack the code around scalability, we can ramp up adoption and start seeing results. For example, I see a big opportunity in new, more tailored product design that’s enabled by insurtechs providing access to new information and understanding of consumer behavior.
Are insurers ready, willing and able to change in order to make the best and greatest use of insurtech innovation?
The energy and dialogue at InsureTech Connect was overwhelmingly optimistic. Now, it’s a question of how to harness that energy into an outcome. Where is the tipping point where aspiration meets execution? We’re not quite there yet—but we’re close.
My colleagues have shared their takeaways from the conference. I encourage you to read Daniele Presutti’s summary of the conference, and John Cusano’s take from day one and day two of the event. If you’d like to discuss how Accenture can help incumbent insurers harness the value of insurtech, please email me.