How Are Startups and Incumbents Collaborating to Drive Innovation and Meet Changing Consumer Demands?

This March, The Fintech Times is putting the spotlight on insurtech, including diving into the collaborative efforts between startups and traditional insurers.

Synergy between innovation-driven startups and established industry players is not only reshaping traditional practices but also addressing the dynamic needs of modern consumers.

We reached out to insurance experts to gain insights into how startups and incumbents are collaborating to drive innovation and meet changing consumer demands.

Combined strengths
Quentin Colmant
Quentin Colmant, CEO, Qover

Quentin Colmant, CEO and co-founder of insurtech Qover, says collaboration between startups and incumbents is essential to drive innovation and meet evolving consumer demands.

“At Qover, we stress the importance of combining strengths and innovation to navigate the complexities of the insurance industry. Legacy players bring expertise and a long-term view, with a capacity to approach risk across different cycles. Solvency ratios are key indicators of stability and strength in this regard.

“However, today’s rapidly changing business landscape, characterised by global companies and digital advancements, requires a different approach. Insurers are adapting by collaborating with new actors and tech orchestrators, who are enabling a quicker delivery to meet evolving demands.

“While insurance companies have the capacity to adapt independently, the momentum for collaboration is now. Partnerships are key to navigating the complexities of the insurance value chain, which includes high-demand client expectations for cross-border digital services and customer care.

“Ecosystem partnerships are crucial to creating a better value chain and embracing technologies that meet customer needs while focusing on user experience.”

Filling a gap
Mike Mcnerney, senior vice president of security at cyber risk solution company Resilience
Mike Mcnerney, senior vice president of security, Resilience

Startups thrive by addressing unmet needs, says Mike Mcnerney, senior vice president of security at cyber risk solution company Resilience.

He said: “Startups excel when they fulfill a need not being met by incumbents. In the cyber market, the unfulfilled needs were excess demand and improved risk analysis.

“As they get traction, startups will push incumbents to adapt. Either the incumbents will adapt and compete or they won’t and will be disrupted. The end result either way should be a superior offering for the customer.”

Addressing risks
Reijo Pold, co-founder and CEO of global insurtech company Value.Space,
Reijo Pold, co-founder and CEO, Value.Space,

Reijo Pold, co-founder and CEO of global insurtech company Value.Space, underscores the symbiotic relationship between insurtech companies and incumbents to drive rapid adoption of new technologies in the insurance sector.

 “The insurance sector is acutely aware of the need to innovate. Insurtech accelerators set up by the industry, such as Lloyd’s Lab, the innovation hub of the Lloyd’s of London global insurance market (of which Value.Space is an alumnus twice over) effectively leverage the expertise of the insurance industry and the innovation of insurtech startups to facilitate rapid industry-wide adoption of new technologies.

“Experience shows that the drive to widen the application of new technologies has become firmly ingrained in the relationship between Insurtech companies and incumbents. Our insurance sector partners and clients who have adopted satellite-based risk assessments see the clear benefits and have come back to ask for more.

“So much so that we’ve added new asset classes to our product portfolio. Take subsidence-related damage to property – in France and the UK, subsidence claims and losses are expected to surge in the decades ahead but until now, the insurance industry has lacked the tools to identify, monitor, and quantify this climate change related risk effectively. With our satellite-based monitoring and risk assessment technology we have swiftly created the capability to address this gap.

“This forward-looking cooperative mindset between insurtech and incumbents benefits the insured, helping to ensure that insurance products remain available despite the emerging, more volatile risks in the years ahead.”

Benefit realisation
richard hartley cytora
Richard Hartley, CEO, Cytora

Richard Hartley, CEO and co-founder of Cytora, a provider of AI-powered solutions for the commercial insurance, said: “The insurance industry has been one of the first sectors to embrace AI in a significant and sustainable way. Much of this is down to how the insurtech sector has found willing partners across the insurance industry to drive adoption.

“A powerful ecosystem of insurtech startups has developed offering a range of solutions to different problems the insurance industry faces. We can see this most readily in the digital transformation of many parts of the insurance process.

“Many insurers now collaborate with insurtechs on executing these projects because it accelerates their target state, benefit realisation and reinforces their unique competitive advantage.

“For example, Cytora enables each insurer to uniquely configure the platform enabling them to accelerate their competitive differentiation and become more different from their competitors.”

Reducing anxiety
Megan Bingham-Walker, co-founder and CEO of shipping insurance platform Anansi
Megan Bingham-Walker, co-founder and CEO, Anansi

Megan Bingham-Walker, co-founder and CEO of shipping insurance platform Anansi, advocates for a paradigm shift in insurance, viewing it as a tool to enable businesses to compete effectively in the e-commerce-driven landscape.

“By expanding the concept of insurance to go beyond just protection or peace of mind and viewing it as a tool that enables a business to compete more effectively, we can start to provide new opportunities to drive better bottom-line results and outcomes for businesses and meet evolving consumer demands as we continue to shop online.

“In today’s e-commerce-driven world, the delivery experience is the customer experience. But the statistics are clear. The more we shop online, the chances are we’ve had a bad experience. In fact, 33 per cent of online customers have experienced package delivery issues over the past 12 months. Of those, 61 per cent of customers would turn to a competitor after just one bad experience.

“Simply put, for every 100 deliveries, 20 could result in customers turning to competitors. With customer acquisition costs on the rise—one study says it increased as much as 222 per cent between 2013 and 2022 – that’s a lot of valuable customers you have to replace at a high cost to any business. Depending on which industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.

“Through the process of shipping insurance and leveraging the data generated, Anansi can start to drive more than just protection; we can drive accountability. Creating huge opportunities for brand and customer loyalty, we not only provide a streamlined and proactive approach to claims, but the data enables us to understand where the problems are in the process and track potential gaps in performance. Ultimately, with enhanced transparency, last-mile deliveries won’t be the weak link in the customer journey. Reducing anxiety and building trust.”

Keep insurance efficient
David Daiches, COO and co-founder, INSHUR
David Daiches, COO and co-founder, INSHUR

David Daiches, COO and co-founder of insurance provider INSHUR, highlights the importance of blending traditional insurance expertise with startup tech innovations to efficiently offer flexible coverage.

“While demand for apps like Uber and Deliveroo is booming, the products offered to this growing market by incumbent insurers are often not fit for purpose. Increasingly, on demand taxi and delivery drivers are calling for insurance that caters to their specific needs, enabling them to buy flexible and comprehensive coverage for when they’re driving – and switch it off when they’re not.

“What’s needed now is an evolution of traditional insurance expertise, supported by tech innovations from startups that are designed to keep insurance efficient and premiums affordable for drivers, such as insurance products being embedded into on demand apps where they can easily access them.

“When INSHUR acquired American Business Insurance (ABI) last year, we gained over 40 years’ experience and intelligence in the commercial auto insurance industry, along with strong loss ratio performance data. With the addition of our technology, partnerships and underwriting expertise, together with ABI we are delivering superior products and coverage to taxi and delivery drivers across the US.

“For the insurance industry to truly meet the needs of its consumers and partners, it must successfully combine startups’ tech and data innovations with insurance incumbents’ decades-long expertise.”

Plug-and-play approach
Daniel Garsin, partner at challenger consultancy Elixirr
Daniel Garsin, partner at Elixirr

Daniel Garsin, partner at challenger consultancy Elixirr, highlights how technology-focused companies, akin to fintech disruption, drive insurance innovation with plug-and-play solutions for incumbents.

“Historically, many incumbents have found it hard to innovate in order to meet changing customer needs. Enter emerging, more nimble technology-focused companies who are driving innovation and much needed change across the insurance sector.

“Much like we have seen in fintech in recent years, insurtechs are starting to disintermediate a particular aspect of the insurance value chain by delivering best-in-class technology, such as claims processes powered by AI, instead of trying to be an end-to-end insurance provider or providing an entire tech stack that positions them against legacy technology companies.

“They are selling their services directly to insurance companies who are embedding the technology within their technology stack and/or white labelling services as new products.

“Those who embrace this plug-and-play approach and who build their new technology infrastructure in modular, open ways will allow for a quick test and learn of new capabilities from these insurtechs. This is allowing larger, once inflexible, organisations to provide far better experiences for colleagues, intermediaries and customers and set themselves up for a new era of profitable growth.”

Dynamic ecosystem
Meeri Savolainen, co-founder and CEO at INZMO
Meeri Savolainen, co-founder and CEO at INZMO

The collaboration between startups and incumbents is creating a dynamic ecosystem that drives innovation and meets changing consumer demands,  says Meeri Savolainen, founder and CEO of Berlin insurtech INZMO.

“With their agility and tech-driven approaches, startups are introducing disruptive technologies and business models that challenge traditional insurance paradigms. Incumbents, on the other hand, offer scale, experience, and regulatory savviness.

“These collaborations often occur through accelerator programs, strategic investments, or joint ventures, facilitating the exchange of insights, technology, and market access. Startups benefit from the incumbents’ vast customer bases and deep industry knowledge, while incumbents tap into startups’ innovative solutions and fresh perspectives.

“This synergy accelerates the development and deployment of new technologies, such as AI, IoT, and blockchain, into insurance products and services. The result is a more responsive industry that can quickly adapt to consumer trends, such as the demand for personalised insurance, on-demand coverage, and seamless digital experiences.”


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