In InsurTech Caught on the Radar, Hype or The Next Frontier?, Oliver Wyman — in partnership with Policen Direkt — identified and examined startup business models across the insurance industry in order to determine what’s next in disruption.
“InsurTech has already impacted the insurance industry globally and triggered a lot of change – often to the advantage of the consumer,” explains Dietmar Kottmann, Oliver Wyman partner and co-author of the report, which was developed using a proprietary database of more than 1,000 InsurTechs and other relevant players.
So who — or what — will cross the InsurTech finish line first? Here are the three takeaways from our findings that you need to know.
It’s all about the second wave
“The first wave of InsurTechs brought forward a lot of activity but little real disruption,” explains Kottmann. “There will be a second wave of InsurTechs which are savvier, more creative and more ambitious, with the potential to truly change the way insurers cover risk.”
This second wave of InsurTech operations will be more savvy, and excel at new forms of consumer and partner engagement that incorporate true “demand side” thinking. This will foster the development of more creative and ambitious offerings that keep them at least one step ahead of the incumbent curve.
“The question is how will the insurance industry respond,” Kottmann added.
Where the white spaces are
“A lot of the InsurTech investment today seems to be driven by conventional e-commerce thinking applied to insurance,” notes Nikolai Dordrechter, Managing Director of InsurTech investor Policen Direkt and co-author of the report. “Some areas are overcrowded already and will see a shake-out. But there are also some surprising white spaces offering great opportunities for entrepreneurs and investors.”
This means that there are several areas in which either incumbents embracing digital change or firms from outside the insurance industry are the most likely to succeed — it’s not a zero sum game between InsurTechs and established or legacy firms.
It’s all about collaboration
The report’s analysis examines InsurTech operations with 19 distinct business models and three primary categories. But despite their differentiated roles within the industry value chain, InsurTech startups and visionaries across this spectrum must work closely with the existing insurance industry in order to create true solutions that meet the needs of customers and truly evolve the industry.
“Even if InsurTechs win a specific category that does not necessarily mean that established insurers go out of business and become obsolete,” Dordrechter explains.
For more detail on the report, read InsurTech’s Business Model Diversity.