November 15, 2017 by Canadian Underwriter
Why are Insurtechs and fintechs frequently hailed as more agile than insurance companies following a more established business model?
Martin Thompson, CEO of RSA Canada, said it’s easy to be bullish on the agility of insurtechs if you take customers out of the equation.
“While tech firms are more agile — we think that, certainly — it’s because they’ve got no customers,” Thompson said at the Insurance Institute of Canada’s At the Forefront breakfast in Toronto on Tuesday. “If you start from a position of not having any customers, then you can be agile as you want.”
Drawing an estimated $1.7-billion in investment annually, insurtech start-ups boast innovative digital technologies to improve the consumers’ experience of buying insurance. Examples include:
Typically, insurtechs promise consumers a straight-through, fully-automated insurance purchase with innovative digital functionality, products and lower friction costs.
Some insurtechs see themselves as supplementing the work of traditional insurance companies, not competing with them. “Insurtech partnerships are a current trend in the insurance industry and are proving key for companies to achieve success,” says Charles Taylor Insurtech in a blog post. “The partnership set-up enables Insurance companies to focus on what they do best, Insurance, and insurance technology companies to empower insurance companies to drive digital disruption.”
Thompson said the challenge for traditional insurers “is that you have demands from, hopefully, tens to hundreds of thousands of customers, and at the same time cannot change the processes. The current reality is that you are asking people to drive change in the organization while they are doing their day job, so you are not going to win.”
To stay nimble, Thompson said RSA Canada is taking people to the side and asking them to focus on making a specific change, and to see that change through. Another option is to create more agile teams within the business.