Robin Smith, chief executive of WeGoLook discusses how partnerships can boost innovation
Partnerships are not typically at the top of every decision-maker’s mind. These business arrangements can seem complex and unfamiliar. With the rise of digital and mobile innovation in all industries, including insurance, partnerships are more important to our businesses than ever. Having been through a recent high-profile partnership here are WeGoLook when Crawford acquired a majority share in our business, I am acutely aware of the power of strategic partnerships and how they can propel our businesses to new levels of success.
Today, I’d like to expand on my presentation to the Insurance Times Innovation and Disruption 2017 conference by exploring the power of strategic partnerships in the insurance sector. There are a number of recent examples of incumbent insurers partnering with Insurtech players that highlight the power of partnerships, and the successes they have brought to the parties involved. We are, indeed, stronger together!
Stronger together: the power of partnerships in insurance
“We are getting, through our partnerships, access to the latest technology, a deeper understanding of the end customers, a closer engagement with them, and this enables us to continue to be able to better design insurance products to meet the evolving needs and expectations of the public.” – Munich Re Digital Partners, March 20, 2017
Given the rise of innovative Insurtech platforms, we are witnessing an unprecedented push by incumbent insurers for partnerships. In May of this year, Insurtech Internet of Things (IoT) provider Neos formed a strategic partnership with Munich Re to underwrite Neos’ smart home technology. Neos, which raised $5 million in investment, created an innovative home insurance product that uses IoT technology to detect fires, water damage, and theft. This partnership provided Neos with the underwriting capacity it needs to scale its product, and gave Munich Re exposure to a VC-funded startup disrupting the insurance industry.
In May 2017, Sure, an on-demand insurance app, partnered with Nationwide to put Nationwide’s renter’s insurance directly on the Sure app in both California and Washington. This gave Nationwide exposure to new customers who use mobile apps for insurance, and allowed Sure to tap into the massive Nationwide customer base.
In late 2016, pet insurance and smart collar startup Nuzzle partnered with Embrace Pet Insurance to distribute pet insurance products in partnership with each other. This gave both players access to new distribution and market channels.
Insurance incumbent Allianz recently acquired a minority stake in Insurtech startup Simplesurance. Allianz can now tap into Simplesurance’s innovative software allowing customers to buy insurance digitally via self-service channels. The benefit for Allianz is clear – it can now significantly reduce its distribution costs
Insurtech startups are not the only companies worthy of partnerships. CSAA Insurance Group recently partnered with ride-sharing company Lyft to provide car owners involved in a claims process with $200 in Lyft credits. Also, in March of this year, Aviva partnered with Hibob to integrate Hibob’s innovative HR cloud platform for small businesses into Aviva’s claims system. Aviva was even a recent investor in Neos, the IoT Insurtech platform noted above.
But let’s not stop there
As digital innovation compounds, the rules and risks associated with all aspects of life will continue to change. This ever-accelerating evolution will create new opportunities for insurance companies in the days ahead. Therefore, partnerships with non-insurance entities such as regulators, governments, and communities will become critical for insurers to reach new levels of success. Rules will need to be revisited and rewritten. New ecosystems will present themselves forcing reaction from all potential partners.
One of my key takeaways from the Insurance Times Innovation and Disruption 2017 conference was a reaffirmation of the importance of keeping strategic partnerships in mind. If we, as an industry, want to embrace the inevitable change brought by digital innovations, partnerships are essential and required.