Last year saw one of China’s leading property insurance providers – China Pacific Insurance Co (CPIC) – make a strategic investment in San Francisco-based Metromile. By investing in the leading pay-per-mile car insurer in the US, CPIC gained access to a platform for developing innovative, usage-based insurance products and expanding the markets for them.
Almost $6 billion has been invested globally in insurance technology startups (insurtechs) in the last five years, particularly in digital customer engagement, mobile insurance management and analytics. In Australia, a new insurtech industry association was launched this month, dedicated to the advancement of insurance innovation and startups.
Collaborating with insurtechs, or at least evaluating them, has many potential benefits for insurance sector CIOs, but there are also downsides.
Speaking at Gartner Symposium/ITxpo in Australia this week, Juergen Weiss, managing vice president at Gartner, said the vast majority of insurance CIOs are still struggling to progress their digital strategies, despite digitalization being one of their top priorities. This is often due to a lack of agility caused by legacy IT systems, flat IT budgets and a lack of the right skills or the delivery models to support innovative business models.
“Insurance CIOs need to expand their market insight concerning the innovation and disruption potential of insurtechs,” Weiss said. “Start by identifying the areas where insurtechs could add value; then evaluate potential collaboration or investment opportunities.”