The Big Question: Are insurtechs solving real problems or just chasing hype and funding?

Will Pritchett, insurance industry lead for UK, Ireland and Africa at Accenture

The debate over whether insurtechs are solving real problems or merely chasing hype and funding is not new, but it is especially relevant in today’s AI-fuelled environment.

Over the past decade, we have seen waves of enthusiasm in blockchain, telematics and chatbots, often accompanied by inflated expectations. AI is now the focus of global attention and insurance is no exception.

However, to dismiss insurtechs as hype-driven misses the real progress that has been made. A number of technologies have reached maturity, particularly in underwriting workbench capabilities, embedded insurance models, parametric products and the automation of the claims value chain. These are no longer just pilots – they are delivering measurable improvements in speed, accuracy and customer experience.

The enduring test is whether they address insurance’s reputational challenges – the perception of being a grudge purchase, concerns around fairness and transparency of cover and frustration with claims processes. Here, insurtechs have been most impactful. They have highlighted underserved risks, developed tools that support faster and more precise underwriting decisions and enabled flexibility in product design.

Their integration capabilities and user-friendly interfaces have opened the door to self-service, claims tracking and intelligent supplier allocation. More recently, AI analytics and agentic AI models are transforming claims, with automated and augmented decisions being delivered in far shorter timeframes.

While not every insurtech venture has succeeded, their collective influence is clear – they are reshaping the industry to be more responsive, transparent and customer-centric. That goes far beyond hype.

Graham Strait, director of UK markets at Allianz UK

Insurtechs bring fresh thinking and agility to the insurance industry. We see learning and partnering with nimble innovators as a key enabler to realising our ambition to be the easiest insurer to do business with – which means transforming the whole value chain.

The insurtech space – especially with the rise of AI – can be overhyped. Clearly there are transformational opportunities, particularly in areas such as agentic AI, however the enthusiasm for those opportunities can sometimes outstrip the current reality.

Insurer digital ecosystems can also be complex, highly congested and increasingly interconnected, so having a clear strategy is essential to ensure joined-up thinking and maximum value is being derived.

Having clearly defined value propositions is key. Insurers – and, to a certain extent, brokers – are wrestling with the same challenges around data extraction and pricing sophistication, unlocking new growth opportunities and propositions, delivering better service and improving productivity, so distinguishing themselves will be a challenge.

For us, leveraging global partnerships and the significant long-term investments already made gives confidence that we will become the easiest insurer to do business with.

Martin Schultheiss, group managing director at Uinsure

Insurtech is no longer an experiment on the fringes of the market, but a proven driver of progress, helping long-established organisations overcome inefficiencies and legacy barriers while also building strong businesses in its own right.

What began with bold promises has matured into a sector delivering practical, measurable propositions that are reshaping how insurance is built, priced and delivered.

Customers have moved online and now expect the same fast, simple and transparent digital experiences they enjoy in retail, travel and banking.

Digitally active consumers want quick answers, fair pricing and the ability to self-serve. Many insurtechs are meeting this demand directly, proving they can stand on their own with customer-first models, while also providing the tools that allow larger organisations to deliver the same standard.

Legacy systems remain a major barrier to innovation and progress. They are expensive, inflexible and slow to adapt.

Insurtechs have addressed this by providing agile, cloud-based platforms that large organisations cannot easily build itself. At the same time, distribution is being reshaped, with insurance embedded into banking apps, retail platforms and utilities – creating partnerships that are driving growth in ways the market has not seen before.

Funding has matured as well. The so-called gold rush days are over and investors now back businesses with proven revenues, scalable models and meaningful distribution, ensuring capital flows to those addressing real problems.

Insurtech is not about hype – it is now a proven force for progress, essential to how the industry evolves and certain to remain central to its future.

Rosie Denée, head of innovation for commercial education and engagement at Lloyd’s

It is a question I hear often. At Lloyd’s, we see the answer play out daily in the Lloyd’s Lab – real problems, real propositions, real impact.

The Lloyd’s Lab is the innovation engine for the Lloyd’s market. Through our accelerator and wider innovation initiatives, we support a diverse mix of forward-thinking companies – from startups to scale-ups and specialist thinkers – to co-create propositions that address the market’s most pressing challenges.

Take InsurX, whose smart follow technology has accelerated placement speed a thousand times – reducing a two-week process to just 15 minutes. Since graduating, it has traded more than $125m in premium and now serves over 40 global brokers and 17 managing agents.

Optalitix built a catastrophe reporting tool that is now used market-wide, saving 79,000 admin hours and helping report $7bn in claims across 81 syndicates. This is a prime example of transformation happening in real time rather than hype – freeing capacity for higher-value decision-making and reducing inefficiencies across the Lloyd’s market.

Artio is pioneering insurance for early-stage carbon projects. With Lab support, it secured coverholder status in just four weeks and now quotes three to four times faster than the market average.

These are not inflated valuations or abstract ideas – they are transformative initiatives addressing real challenges. The results speak for themselves – faster placements, smarter underwriting and more resilient operations. At Lloyd’s, we are backing the builders reshaping insurance from the inside out.

Amrit Santhirasenan, co-founder and chief executive at Hyperexponential

In an era of rapid risk evolution, insurers need more than incremental change. They need transformation that is technically ambitious, strategically aligned and grounded in deep domain understanding. That is exactly where modern insurtechs like Hyperexponential are delivering value and providing tangible propositions to address real problems.

Pricing and underwriting teams are still plagued by inefficient workflows and fragmented systems, costing hours of manual admin each day and creating opaque, siloed datasets with little decision-making insight.

But efficiency gains alone are no longer enough to validate investment – it is all about how and where those gains are put to use. Propositions and end goals need to be grounded in market conditions and portfolio profitability to ensure they generate concrete return on investment.

Enterprise transformation is not plug-and-play. It demands partnerships built on trust, deep vertical expertise, technical excellence and the ability to navigate complex organisational change – something that generic AI vendors or low-code platforms simply cannot offer.

That is why companies such as Markel and Aviva have chosen to work with us – not just for our technology, but for our ability to support delivery at scale across critical lines of business.

The hype cycle has passed. Now it is about impact. And the most successful insurtechs are those delivering it consistently, securely and in close collaboration with their clients.