During the last 4 years I’ve been talking about Insurtech, and I have always done so from the context of collaboration with and transformation of the insurance industry. That’s why to talk about Insurtech is to talk about the next stage for insurance.
Since 2016 we have witnessed the changes and opportunities Insurtech brings to the traditional insurance business, and we have heard of the new companies that have emerged as a result of these changes and opportunities. Actors like Lemonade, Root, Metromile, among others are not new and yet traditional industry players have seen them go from being “nothing” to now being listed in stock markets successfully.
2020 brought us the COVID-19 pandemic, with it came the required analog distancing of people, as a result came the acceleration of our digital interactions, and with it the realization that a traditional auto insurance product, for example, was not adequate for consumption in an increasingly digital world, and so Insurtech platforms started to be seen and used like never before. Did that happen by necessity or conviction? A little of both I would say, and while not ideal, it was certainly a breakthrough for Insurtech. More than ever, this progress is exposing those who are not understanding that insurance offerings are changing, and that the distribution of traditional products is no longer a discretionary decision of the incumbents, but a lifestyle one of new generations of individuals and businesses who are dictating how they want to buy and use insurance in a world that has dramatically changed what we need, when and how we need it.
Connectivity, mobility, logistics and traceability are part of this transformation that forces insurance incumbents to modernize, now more than ever. For example, it’s no longer about selling Marine insurance, it’s about the Marine platform being the added value risk management tool where insurance products live for customers. It’s exactly what Marc Benioff did with Salesforce, instead of continuing to sell a CRM “product” as traditional software companies did for many years, he made it part of a sales “platform” useful to any companies in any industry, in other words, Salesforce killed CRM to transform it into a digital sales platform! With Insurtech we have the opportunity to follow Salesforce’s example, not to kill the insurance product but to transform it into an Insurtech platform.