Why smart insurers are exploring tech collaborations and partnerships
TECHNOLOGY has never been the strong suit of insurers, in the APAC or anywhere else around the globe.
While consultants often talk about the legacy infrastructure in the banking system, not many discuss the archaic systems in insurance companies. And that’s exactly why insurers need more help moving away from old technology and dive head-first into new-age products and solutions that transform the business from the inside-out.
It’s why smart insurance leaders are seeking out tech collaborations to drive their business forward in today’s digital-first era.
At the 2019 Asian Financial Services Congress in Singapore, IDC’s Senior Research Manager Arpita Mitra explained to Tech Wire Asia how and why these partnerships work and how they support a vision and narrative for a brighter future of the insurance industry.
Allianz Malaysia, for example, recently partnered with Policy Street, an insurtech company offering multi-brand insurance policies via an online platform, to rapidly expand its reach in the digital marketplace.
“PolicyStreet complements the puzzle, presenting yet another platform in which, Allianz will be able to further expand our reach in the digital space apart from our own platform Allianz Online,” said Allianz Malaysia Berhad CEO Zakri Khir.
AirAsia Tune Protect, too, recently collaborated with virtual healthcare service provider DoctorOnCall to provide more value to customers.
“Through this partnership with DoctorOnCall, travellers will be able to connect with doctors and receive medical attention irrespective of whether they are in Bali, Bangkok or Ho Chi Minh,” said Tune Protect Chief Digital and Marketing Officer Loh Ben Jern.
While these partnerships are more simple in the way they work, leaders in the insurance space are also exploring other forms of partnerships — with a greater degree of involvement — that help them upgrade their internal systems while also offering new and exciting products and services to customers.
An insight into collaborations and partnerships
While examples from Allianz Malaysia and Tune Protect above are more flexible, some technology partnerships that insurance companies get into are more hands-on.
For example, Tune Protect recently bought a 9.99 percent stake in UK-based startup Laka Ltd — a company that allows consumers to join as members without having to make upfront payments. Monthly claims are instead settled as part of a group risk pool plus a fee.
This partnership is expected to allow Tune Protect to bring about more of an internal change rather than a direct and immediate benefit to customers, although the insurance provider does have the flexibility to determine how it actually uses the partnership.
During the chat, Mitra explained that when getting into a partnership, insurance companies must spend some time thinking about the insurer’s needs in terms of technology.
To be more specific, there are two things that Mitra recommends leaders understand and discuss before forming an alliance or partnership of any sort:
“First, insurers must understand what is the purpose of the technology they’re trying to use.”
IDC’s Senior Research Manager has worked with enough insurance giants across the APAC to know that this is a question not many really ask. They’re allured by the technology itself, which is why thinking about this is more of a priority today.
She recommends leaders list down the pain points that the new technology partnership can solve and determine whether they’re looking at the technology partner as a solutions provider or as a knowledge provider. Doing so will bring clarity to the team in terms of next steps.
“The second thing is understanding how to scale the solution once the partnership has been entered into.”
Mitra points out that before diving into a new technology partnership, insurers must understand how the nature of the partnership with the technology company might change over time — whether the insurer plans to invest in the company, form an alliance, or bring them onboard as a knowledge partner.
While these are just initial things to think about, Mitra points out that collaborations and parterships can do wonders for insurance companies. In the future, more of these will make headlines — and help insurers propel themselves ahead of competitors, in APAC and across the world.