October 4, 2017 by Canadian Underwriter
New research out of the United States assessing 600 start-ups identified as relevant for personal lines insurers indicates these new players may fail, but they are having a tangible impact on the p&c insurance industry and how it delivers services, Strategy Meets Action (SMA) reports.
The report, InsurTech and Personal Lines: Examples, Use Cases, and Implications, which analyzes insurtech’s current state, notes a statement Wednesday from SMA, an insurance strategic advisory firm. Start-ups in the report were identified as part of SMA’s ongoing tracking, analysis and advisory work with insurtechs and insurers.
More than half of the start-ups assessed – 360 in all – are identified as being “pure insurtech,” meaning the entities have an exclusive focus on the insurance industry.
The two remaining groups amount to about a quarter of the assessed start-ups having solutions for the connected world, including those for auto and homeowners, with the remainder being insurers investing in a series of strategic initiatives that support insurtech and the digital connected world.
“Although many start-ups may, ultimately, fail, many others will be successful and play a major role in the transformation of the industry,” suggests Mark Breading, SMA partner and report co-author (SMA founder Deborah Smallwood is also a co-author).
The number of start-ups relevant to personal lines insurers “is changing every day through the entries of new companies and the exits of others,” the report brief notes.
“Insurers are still trying to sort the hype from the reality, determine how insurtech affects their company or business area, and develop strategies for partnering or investing,” it points out.
The insurtechs analyzed in the report are categorized by location (country) and company type (tech, broker, insurer), as well as classified and grouped into nine key categories. These include greenfield insurers, distribution disruptors and smart homes.