General Insurance Article - Reinsurance companies gain a form of control over InsurTech


According to the fourth Quarterly InsurTech Briefing from Willis Towers Watson incumbents are exerting an increasing level of influence on the start-up community as part of an emerging trend described as ‘The Sobering of InsurTech,

 The latest research, produced by Willis Towers Watson Securities and Willis Re, in collaboration with CB Insights, examines the evolution of the InsurTech market in 2017 and highlights an emerging trend of (re)insurers, directly and through corporate venture arms, increasing their activity in the sector and expanding their focus to invest in a broad range of technologies with potential applications to their core businesses.
 
 The report notes that 35 private technology investments by (re)insurers in Q4 and 120 private technology investments by (re)insurers in 2017 are the highest totals recorded in any quarter and year to date, respectively. Further, 65% of incumbent InsurTech investments to date have been in businesses focused on enabling the value chain, as (re)insurers have attempted to enhance the efficiency of product delivery, underwriting, claims and other administrative functions.
 
 $697 million of InsurTech funding in Q4 rounded off 2017 at a total of $2.3 billion, a 36% increase from $1.7 billion recorded in 2016 and the second highest total for any year to date.
 
 Rafal Walkiewicz, CEO of Willis Towers Watson Securities said: “Incumbents sent a clear message to potential disruptive outsiders: by investing heavily in start-ups and technology, (re)insurance companies appear to have assumed a semblance of control over the InsurTech revolution. During the year, conversations about disruption of the existing value chain evolved towards an efficiency-driven search for incremental innovation. However, technology revolutions rarely result in redistribution of power among incumbents. It can be argued that incumbents’ collective response to InsurTech hype has diminished their ability to recognize true disruption.”
 
 The report also includes findings from a (re)insurance innovation survey which received responses from nearly 600 (re)insurance and investment professionals. Of note, 75% of respondents believe their company is “moderately” to “extremely” at-risk of disruption, even as 72% of company innovation resources, on average, are devoted to incremental technologies (instead of disruptive or radical ones) and nearly half of respondents describe their company’s innovation philosophy as “ad-hoc,” meaning their company is neither explicitly a first mover or a fast follower.
 
 Alice Underwood, global head of Insurance Consulting and Technology, Willis Towers Watson said: “(Re)insurers are evaluating the cost associated with early adoption of new technology; this investment can yield great reputational and financial benefits if handled well, but companies that position themselves as fast followers can reap a fair amount of benefit with relatively less risk. However, companies that wait too long may find they can’t make up lost ground once anti-selection and other competitive pressures set in.”
 
 View the Willis Towers Watson InsurTech Briefing Q4 2017 report
  

Back to Index


Similar News to this Story

Sleighing the risks by giving Santa the insurance he needs
While you might be the most magical employer in the world, we know that even you aren’t immune to the risks of running a global delivery service! From
Diversity improving in insurance and long term savings
Key figures from the Association of British Insurers’ latest Diversity, Equity and Inclusion (DEI) data collection highlight the work of insurers and
Almost a third of homeowners have been victims of burglaries
Research commissioned by Co-op Insurance reveals that almost one in three (29%) homeowners have been the victims of theft from their home. The member-

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.