The Insurtech Board believes that the future of insurance is insurtech, and that the sector is on the cusp of a new dawn. Its chairman tells Insurance Times why
The future of insurance is insurtech and this is more crucial now than ever as the UK emerges from lockdown.
This is according to Ed Leon Klinger, chairman of the UK Tech Nation Insurtech Board.
He told Insurance Times: “We as a board, really believe that the future of insurance really is insurtech, this is the message we are trying to get across, which is more crucial now than ever as we are going into what will become a long term fall out with broad ranging consequences from Covid-19.”
It follows a joint statement from Tech Nation Insurtech Board and Insurtech UK, which Klinger described as a “call to arms” reiterating the importance for insurance leaders to commit to innovation and technology as well as laying out four actionable commitments for them.
Klinger added: “We think it’s important that insurance leaders commit to backing innovative technology-led projects. Whether this be internal projects, third party projects or with insurtechs – there’s an enormous opportunity here.
“There’s a real need for insurance leaders not to turn a blind eye to innovation and technology as it is the future of the industry.”
The four proposed commitments include:
- The active exploration of strategic partnerships with insurtechs
- Mutual collaboration between insurtechs firms and insurers, to develop initial concepts into products that will ultimately better serve customers
- Investment into new and existing initiatives, via both traditional and corporate Venture Capital
- Communication between firms to ensure that it is clear and timely, and as transparent as possible with respect to the decision-making processes around engagement, funding, and ongoing support
Out of these four requirements, Klinger said transparent communication could be the most important, “We have seen insurtechs talk about how difficult it is sometimes to work with the insurance industry, and we wouldn’t want coronavirus to push that down the pecking the order.
“We would like there to be an open communication between larger and smaller firms, such that insurtechs working with insurers are able to have transparent communication with decision makers, understand the processes around engagement and support, and not being left in the dark until this situation is resolved.”
Make this real
Regarding the statement, Klinger said the Insurtech Board would love for insurance leaders to read it and “make this real within their own firms”.
This is so leaders can understand and are reminded that they should constantly be on the look out for new technology and how it ultimately makes people’s lives easier and the customers they serve.
“Whether that is partnering with insurtechs, buying technology from insurtechs, providing insurtechs with underwriting capacity so that they can go out and sell new products or investing in insurtechs so they can take part ownership,” Klinger added.
Despite many insurtechs being SMEs or startups and both being been hit hard by the pandemic, Klinger believes that insurtech is not going anywhere.
He said: “We are right at the dawn of insurtech, we are starting to see insurtechs growing exponentially, expanding their services internationally, selling to and working with some of the largest insurance companies and sometimes even raising their own balance sheet by buying insurance companies so that they become the insurer – all of this has happened in the last year or so
“I would go as far as saying that insurtechs could be seen as the new fintech and the UK has a real opportunity to seize on that and become the world leader in insurtech, which in my mind the best way that the UK can continue to remain the world leader in insurance.”
Klinger is quite confident about this due to the number of new insurtechs launching, raising capital and releasing incredible innovative products, which he says is changing the lives of consumers and the way businesses see insurance.
Weathering the storm
He said that the companies that best deploy technology will be the ones who can weather the storm.
“There are number reasons as to why this might be the case, they are nimble and agile and quick on their feet, he said. ”They are able to adapt their processes much faster for example working from home remotely using technology. But they are also able to build and launch and iterate new products at pace – the insurtech industry is fantastic at doing this. And finally, the new world order – the post Covid-19 world will demand more flexibility.”