Forming partnerships with InsureTech start-ups could open up valuable opportunities for traditional insurance companies to improve customer service and remain competitive in the digital marketplace, according to PwC.
PwC’s Embracing possibility, boosting innovation survey found that more than a third of insurance CEOs are ‘very confident’ and more than 80% are ‘somewhat confident’ that they can grow revenue over the next year.
However, 60% said that it is becoming harder for insurance companies to compete in an open global marketplace because of moves toward more protectionist national policies. Almost half (45%) of the respondents said they were ‘extremely concerned’ about changing customer behaviour, a 21% increase from the previous year’s survey. Other cited threats included a lack of trust in business (74% of respondents), over-regulation, the speed of technological change and competition from new entrants.
Already, 67% of industry leaders are looking to see how they can use creativity and innovation to keep pace. Insurance CEOs are ahead of their financial services counterparts when it comes to exploring the benefits of humans and machines working together (61%) and considering the impact of artificial intelligence on future skills needs (49%).
Companies are also exploring how they can gain insights into their clients and improve customer interactions – and this is where PwC predicts Insuretech will come in.
“Rather than being just a threat, the growing presence of InsurTech companies could enable insurers to make the leap from incremental to breakthrough innovation,” said Stephen O’Hearn, PwC’s Global Insurance leader. “InsurTech partnerships can help insurers improve their processes, strengthen efficiency and reduce costs. They also can help insurers improve their analysis of the huge amounts of data at their disposal, which can lead to better customer understanding, higher win-rates, and more informed underwriting. Playing an active part in the development of Insurtech is one of the key elements of the ‘fit for growth’ platform we believe will enable insurers to compete on cost, innovation and customer-intimacy.”