The 2017 World Insurance Report (WIR), released today by Capgemini and Efma, has found that the complementary strengths of insurance technology firms, known as ‘insurtechs’, and incumbents form a solid case for collaboration. In fact, of the more than 100 senior executives interviewed from various insurance firms in 15 markets, a strong majority (75%) said that developing insurtech capabilities would help them better meet customers’ evolving demands. And more than half (53%) agreed that having insurtech capabilities would help them quickly design personalised products.
Jack Dugan, executive vice president and head of Insurance at Capgemini, said: “Increasingly, partnerships are being viewed as a welcome development in the ongoing effort to address the insurtech movement. Insurtechs can help incumbents overcome roadblocks such as aging systems and paper-based processes. Meanwhile, incumbents can help insurtechs face newcomer challenges like high customer-acquisition costs and a lack of risk management experience.”
Of the more than 8,000 consumers surveyed worldwide as part of the WIR, nearly one-third (31%) of customers said they rely on insurtechs either exclusively or in combination with incumbent relationships to access insurance services. Respondents also said insurtechs have earned a reputation for better value for money and timely, efficient service.
On the whole, however, customers are not ready to walk away from the ties they have long had with incumbents, citing security, fraud protection, brand recognition and personal interaction as the reasons behind their loyalty. In addition, almost 40% of customers say they trust their insurers, compared to only 26% who trust insurtechs.
Efma CEO Vincent Bastid, said: “The continued reliance of consumers on digital technologies that support mobile apps, social networking, on-demand services and the like makes it clear that the mass market has entered a new phase. The insurance industry serves the masses and must adapt to the new terms of engagement. Collaborating with insurtechs, is an optimal way of incubating and accelerating digital innovation.”
Download the 2017 World Insurance Report here.