Partner Prashanth Gangu recently connected with Giovanni Giuliani, Zurich Insurance Group, Head of Strategy, Innovation and Business Development, on how the company is partnering with insurtechs.
Today insurtechs have the innovation. Rising startups are bringing bold ideas and tools, such as data, analytics and AI, to the next generation of insurance. However, young companies may lack the customer base, market share and ability to distribute their product and services broadly. Many insurtechs are now partnering with traditional players to bring together the best of both worlds and often with successful results—including new revenue streams and operational efficiencies.
Zurich Insurance Group is one incumbent exploring insurtech partnerships. The leading global insurer recently announced the Zurich Innovation Championship—with the goal of finding players that align with their strategy and whom can help further their innovation capabilities and better meet the needs of customers.
This is second year Zurich has run the global competition and this year’s focus is about “Protecting the Next Generation.” “We are looking for ideas and proposals that focus on climate, health and automation,” says Giovanni Giuliani. “Potential issues that are putting a strain on the next generation.”
Giovanni says applications are open until December 17, 2019 and three winners will have an opportunity to work with Zurich on a pilot—with the goal to scale it globally. Last year, the company attracted innovative talent from across the globe and received more than 450 entries from 49 countries. Chisel AI, an insurtech with a natural language, AI processing tool won last year. Chisel AI says the artificial intelligence technology allows commercial insurers and brokers to process unstructured data sources 400 times faster than a human.
We are looking for ideas and proposals that focus on climate, health and automation. Potential issues that are putting a strain on the next generation.
Since winning the Innovation Championship, Chisel AI has been working with Zurich on the pilot. The company’s artificial intelligence software automatically reads policy documents for accuracy. It allows underwriters to shift from time-consuming, process-oriented tasks and focus on higher-value priorities such as better analysis, stronger engagement with brokers and customers, and advice-giving. Zurich and Chisel AI plan to scale the solution regionally in Canada, and then globally.
Giovanni says the next three years for Zurich is about growth, investing in new opportunities, and it’s about retail as well as commercial. As Zurich embraces its insurtech collaboration and invests in the future, it brings forth benefits and advantages. Here are key advantages of establishing partnerships.
Advantages of incumbents and insurtech partnerships
1. Generate a breadth of fresh creativity
If traditional players find themselves stuck in a freeze frame, with the outside moving so fast and competitors responding much more quickly and capturing market share—it’s time to make a change.
Often, young companies are not bound by legacy business models and can reimagine insurance products or services. These fresh ideas can help established insurers bring new digital solutions to meet today’s evolving customer's needs.
2. Gain a competitive edge
Today, there are advanced technology solutions for many aspects of the insurance value chain—underwriting, claims, distribution and customer service. Implementing better data, analytics and AI can improve operational efficiencies, generate new revenue streams, prevent manual errors, and retain and enrich talent. With these benefits, traditional players can not only gain a competitive advantage in the marketplace, but also shift from process-oriented tasks to focus on higher-value priorities.
3. Create more customer-centric product offerings
If an insurer has the scale and brand presence, but sees customers going to competitors for other services such as underwriting or claims, the company must ask itself “why don’t we have the mindshare?” Insurtechs are helping traditional players to simplify processes for brokers, agents and customers. For example, new app solutions are targeting millennial customers and offering faster ways to process insurance claims.
As insurance moves into the next phase of its evolution, partnerships will continue to reshape the industry. To establish mutually benefiting relationships, insurtechs must clearly know what traditional players want and incumbents must also seek out partnerships that gel and align with their strategy.