Other parts of this series:
Tech-savvy start-ups can help traditional insurers navigate the demanding journey to digital transformation.
Insurers are increasingly recognizing that their ability to innovate is vital to their future success. Unless they can change their traditional business models, and create work environments that reward creativity, they’re likely to fall behind their competitors. They might even struggle to survive.
Insurtech ecosystems – digital platforms that interlink big insurers and tech-savvy start-ups – could help insurers pivot from outdated business practices and structures to become highly fluid, customer-centric digital organizations. These ecosystems, as I’ve mentioned in earlier blog posts, would allow insurers access to innovation skills and practices perfected by start-ups. They’d also enable insurers to pull in talent and skills from their start-up partners to help them bolster their innovation capabilities.
During digital transformation, a process we call “rotating to the new”, insurtech ecosystems could play another, crucial, role. They could help insurers manage the correct balance between developing new applications and products while at the same time transforming and growing the traditional core of the business. They could not only help foster the innovation essential for transformation but also encourage the improvement of traditional activities.
“Winning start-ups know how to please their customers.”
Their ability to help insurers rotate to the new is one of the reasons I’m promoting insurtech ecosystems among executives at leading insurance providers. The likely benefits of these shared digital platforms are substantial. Here are some of the ways insurtech ecosystems could benefit insurers during digital transformation.
Fostering fearlessness: Insurers know how to measure and manage risk. But they could learn a lot from insurtech firms about taking risks. Start-ups are willing to fail so that they can eventually succeed. By adopting “test and learn” approaches, common among start-ups, carriers could test new applications and business initiatives on a small scale before ramping them up to be launched commercially.
Pleasing customers: Winning start-ups know how to please their customers. Furthermore, they’re usually staffed by tech-savvy millennials. They can teach insurers a lot about how to connect with their customers and stay relevant.
Embedding innovation: Close collaboration with insurtech firms will give insurers insight into smart new applications and technology. It will also show them how innovation can be fostered and rewarded throughout their organizations.
Building brilliant basics: Insurers don’t need to keep insurtech firms on the fringes of their organizations and just work with them on a few new applications. They can use the disruptive approaches and skills of start-ups to improve the performance of their basic core activities.
Blurring boundaries: Insurtech ecosystems will allow insurers to collaborate, quickly and easily, with other insurance companies, start-ups and third-party service and data providers.
If you’d like to discuss further the potential of insurtech ecosystems, please get in touch.
For more information about how insurers can benefit from working closely with insurtech firms, take a look at this link:The rise of insurtech: How young insurance start-ups and a mature industry can bring out the best in one another.
The Rise of Insurtech: How young startups and a mature industry can bring out the best in one another.
Find out how insurers and InsurTech startups can collaborate to disrupt and elevate the insurance industry.