Consumers seem to prefer what’s online, fast and easy, but insurance has been stuck in the past – too much red tape, too many in-person exams, too long a process.
Now, the digital transformation of the industry is happening at a rapid pace.
Insurtechs are everywhere, covering every sector and raising money at record-setting clips. But the legacy insurance businesses, from carriers to agencies, have already been here and have the deep pockets to remain.
So naturally the story has become about competition for market share.
How much market share will insurtechs take from legacy carriers? When all is said and done, what will the insurance market look like? 50% insurtechs, 50% traditional insurance companies? 40/60?
Except the insurance market shouldn’t be assigned a finite size that needs to be competed for and neatly divvied up. Instead, it can be grown and shared because of the rise of insurtechs and the potential ability to work with larger, more-established insurance companies.
Let’s not compete for market share, let’s work together to grow the size of the market.
Working together
Insurtechs have built streamlined online platforms that use data and predictive analytics to complete the underwriting process in minutes. Legacy carriers and other traditional insurance companies have credibility, human infrastructure and vast financial resources.
It’s a perfect union.
For example, many insurtechs have created agent portals which allow independent insurance agents and brokers to use an insurtech’s online platform and underwriting technology to sell insurance in a much more efficient manner. With an online platform that does most of the heavy lifting, agents can add new insurance products to their arsenal, and at the very least present them to clients in a digital format.
Insurtechs can also work with traditional insurance carriers to sell the latter’s products through the former’s platform. It’s another mutually-beneficial relationship that ultimately helps scale the insurance industry.
Insurtechs benefit from new consumers brought in from the traditional insurance network. The legacy insurance companies benefit from a faster, easier way to sell insurance products. Insurtechs and legacy insurance companies can work together to grow the industry on both the B2B and B2C fronts.
It can also be done through investment. Many insurtechs are young and bootstrapped, and bigger insurance carriers have the funds and industry experience to help grow these tech-driven products. The insurtech’s successes will then become the carrier’s successes, and there is a common goal to grow the insurance market.
Competition is never a bad thing. It drives innovation, ambition and success. Naturally, modern insurtechs and traditional insurance companies are going to compete moving forward.
But instead of always focusing on competition between insurtechs and the legacy insurance industry, let’s sometimes look to collaboration.
Insurtechs are doing some amazing things right now to transform the industry, but they still lack in some areas where the legacy carriers excel. These are the mutually beneficial opportunities we need to identify and capitalize on to bring the insurance industry to new heights.
Source: Digital Insurance
