Research from PwC suggests a high number of insurance technology (insurtech) start-up companies focused on modernising the sector.
Improving client relationships was the focus of more than a third (35%) of 1,300 start-ups looked at by start-up incubator Startupbootcamp InsurTech and accounting and advisory firm PwC.
Some 75% of established insurers think the biggest impact to the industry will come from building new products to address customers’ changing needs.
Incumbents see new products as an opportunity to redefine customer interaction, noted PwC.
The majority of new players do not seek to replace existing insurance companies, PwC reassured, considering themselves enablers rather than disruptors to work with clients to develop more suitable products sooner.
“The insurance industry is slowly waking up to the inevitability of change around it and start-ups are looking to facilitate, rather than hinder, change. The key will be working together,” said Sabine VanderLinden, managing director at Startupbootcamp InsurTech.
The report found that a smaller number of insurtech companies are focusing on helping insurers cut costs and improve efficiencies through data analytics and streamlining back office processes, continuing a trend already present in the banking sector.The study suggested that if start-ups can help insurers reduce their costs by better analysing data and utilising new technology, such as sensors and wearables, the industry could pass some cost savings on to the customer while improving early movers’ competitiveness.
“This is developing into a real opportunity for the industry to change its somewhat tumultuous reputation with its customers and continue to tackle some of society’s biggest problems,” said Jonathan Howe, PwC’s UK insurance leader.
“The industry is moving towards a role in which it helps customers prevent loss or damage, not just reimburse them after an event. By embracing new technology and ways of thinking, the insurance industry can underline its role as a trusted partner to both consumers and businesses,” Howe added.