Insurers getting off the bench: billions poured into insurtech exploration – going where and why?
Photo credit: Casa Llotja de Mar
The FT opened last week with the announcement that (finally) the insurers are joining the fintech race, Aviva has a ‘Digital Garage’ in London, MetLife a lab in Singapore, AXA, Allianz, MassMutual and Ping An – to name but a few – have launched VC funds dedicated to insurtech hoping not only for a return (which they obviously do in these hard-up times of investment returns and interest rates), but also for expertise and experience in what insurtech firms do and how they can cooperate with those ‘new kids on the block’. When ‘fintech’ as a phenomena started say 5 years ago, it was almost all about ‘gadgety’ ways to transfer money. Payments being the backbone of banks, and in many countries a ‘bone of contention’ was an easy target. Three years later – in my early days of the @Fintech50 panel, digital ID, lending and funding joined the fray. Big data was next and that would enhance our customer view so banks could sell more to better targeted customers. Bitcoin, block chain, and the fintech circus was firmly on the road.
Insurance firms tend to take more time when it comes to tech trends than banks. This might have to do with the nature of their business: client relationships (and contracts) can run a lifetime. It is by its very nature a profession for the cautious and the careful, the data crunchers and the calculators. That will never change, however the customers still demand all of the above plus the retail experience of buying books topped off with the service delivery experience of an Emergency Unit in a four star hospital. The industry suffers from less moments of interaction with their customers, but the moment ‘of truth’ experiences leave a lasting imprint and as such are a valuable commodity. So what can insurtech mean for the insurers – and their clients? Where should these billions flow to have impact? First of all, the money will freely flow in the US and China, however this does by no means draw a fair picture. Insurtech start-ups and scale-ups flourish in Europe too. Our ‘Seven Flavours of Fintech in Insurance’ basically introduces a framework to connect demand and supply in insurtech, based on the true needs of the industry.
By Conny Dorrestijn, co-founder DIA Barcelona and listed on Women in Fintech 2015