The pandemic has proved challenging for insurtechs with funding being pulled in some instances as well as not being eligible for government loans
Tech Nation Insurtech Board and Insurtech UK have come together to put forward a statement urging all leaders in the insurance sector to take on a series of innovation commitments and support for insurtechs as the UK emerges from lockdown.
It states that “the impacts of Covid-19 on the insurance industry are immediately pressing with unclear longer-term repercussions”.
It argues that innovation and insurtech pave the way for the future of the insurance sector and that this is “critical juncture” and that the sector must now band together as best as it can.
These four 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
It follows the government forcing SMEs in the UK to shut down to mitigate the spread of the coronavirus since late March, but on 4 July many non-essential businesses were allowed to re-open.
The statment said: “Insurers are dealing with unprecedented pressures from every angle; looking after customers and partners is a clear priority, as is supporting staff through both remote-working and dramatic changes to working and personal lives.
“Insurers are understandably reprioritising within their businesses, but in these challenging times, there may exist the temptation to pull support from mid-term and long-term opportunities, such as innovation and insurtech (including internal technology initiatives, providing funding to startups, and providing underwriting support for insurtechs).
“Innovation in the UK insurance sector depends heavily on the leadership of our major insurers. They are the engine rooms that many of our best and brightest Insurtechs build their businesses upon, and they often underwrite the risks that allow our insurtechs to innovate on behalf of customers.”
Beacons for the future
This it said is because many insurtechs are SMEs who are now facing tremendous challenges as a result of Covid-19 and its impact on the economy.
“They are also beacons for the future of the insurance sector and leaders in their own right, with a responsibility to ensure that the products and services they provide add tangible value for customers, particularly in these difficult times,” the statement continued.
Therefore it stated that if UK insurance leaders remain committed to innovation and insurtech, then the UK will remain a global leader in insurance and will be well-positioned to emerge from the current crisis with a more resilient, sustainable, and customer-centric insurance sector.