How insurtech and insurance providers can collaborate better
INSURTECH companies are focused on delighting customers and explore elements that are deemed too tedious for traditional insurance providers. That’s why they win.
In the digital era, customers expect customized insurance policies, data-driven underwriting, as well as seamless claims processing and insurtech companies deliver.
As a result, many insurtech startups have successfully disrupted the insurance sector in many markets, leaving established insurers scrambling for new ideas to keep up.
However, there has been a realization in recent times that, instead of competing, collaborating may serve their mutual interests.
Modern insurtech platforms and traditional insurance providers possess unique qualities and strengths that could be combined to provide better services to customers. Last year alone, this type of collaboration attracted over US$4.1 billion in funding.
To ensure these partnerships fully unlock their true potential, global multinational risk management, and insurance brokerage firm Willis Tower Watson has come up with a “five S” framework to help insurance companies overcome inherent organizational risks that could impede innovation.
#1 | Sponsorship – From the top
For any partnership to work, it requires buy-in from the executive level. The top management has to show commitment, conviction, and vision on how insurtech will bring more value to the company.
The business leaders also have to allow the entire enterprise to experiment and try out new methods in their pursuit of innovation, which could be at odds with typical corporate culture.
#2 | Sight – Finding the right partner
As the insurtech space is getting crowded quickly, insurance companies must choose a partner that could provide the right elements to help achieve business goals.
Leaders need to be able to identify, attract, and foster a working relationship as well as align their strategic business objectives.
#3 | Separate – Allowing room to grow
Developing a new solution to may take some time and insurtech firms, as well as insurance carriers, must establish appropriate testbeds to nurture technology until it becomes mature enough to be integrated into the business process.
Creating innovative platforms within the usual business operation may be challenging, and office bureaucracy, processes, and metrics could suppress innovations.
#4 | Speed – With caution
Being agile and nimble by nature, insurtech firms often move at a quicker rate compared to traditional carriers that have more structured but also considerably slower decision-making processes.
Companies need to provide a safe environment where tech-driven innovation can flourish, and teams need to be empowered to grow and learn quickly.
#5 | Stealth – Be patient
Finally, companies also need to move stealthily during the insurtech development phase to maintain a competitive edge.
As the insurtech space is relatively new and small, keeping these initiatives under wraps until they’re truly ready for deployment would only help the company in the long term.