Insurers ink new alliances for innovation push
This week saw another string of initiatives unveiled by European insurance carriers designed to drive innovation through the use of technology.
Italy’s Generali announced a tie-up with Alphabet’s (aka Google’s parent) Nest Labs division to offer home insurance policies bundled with Nest's smart home technology which detects smoke and carbon monoxide, and sends alerts to customer's phones.
RSA announced its first investment in an insurtech startup, buying an undisclosed sum in PitPatPet, a company that makes a device for dog collars that measures the animal’s vital statistics and makes recommendations to owners via a mobile app.
It is not easy for insurers to drive innovation. Transforming business processes and ways of working that date back decades is not something that happens overnight. And in many cases, this has to be achieved while untangling and simplifying the business after a period of aggressive M&A activity – while meeting escalating compliance demands.
But the sector is transforming at a faster than many might have expected, and part of the reason is the new breed of leadership that has been brought in to lead the organization through the digital age. Seven of Europe’s ten largest carriers have recruited new CEOs in the last 18 months.
PAC has just published a new study which looks at how the sector is responding insurers are restructuring in order to better harness innovation both from within the business and through external suppliers. It also looks at specific examples of innovative projects that carriers have recently undertaken, and looks at what they are trying to achieve through this investment.
One of the most intriguing findings was that 84% of insurers have a formalized innovation strategy, with dedicated teams, processes and budgets. This suggests that insurers are no longer just paying lip service to driving innovation, and it is something that is being driven at a boardroom level and sits at the heart of the organization.
One of the biggest drivers to change is that the new competitive threat that is facing the established players. Some 80% of carriers state that they have experienced strong or medium disruption from new competitors. And with the sector starting to see the kind of competitive landscape shake-up already experienced in retail banking, further tie-ups between the old order and the new breed of tech-centric suppliers.
A link to the Executive Summary can be found here.