Capgemini and Efma’s World InsurTech Report 2021, has been published today.
It reveals that InsurTechs and BigTech players are leveraging significant capital inflows to boost technological development and fuel innovation, turning up the heat on incumbent insurers. New age digital players are offering greater personalization and emphasis on customer experience, thus achieving maturity and customer adoption. In response, incumbents are attempting to strengthen their tech capabilities by partnering with or acquiring InsurTechs and shifting from “doing digital” to “being digital”.
According to the report, tech giants and InsurTechs have secured unprecedented access to capital allocation from investors and are bolstering their digital capabilities, increasing their lead as innovation frontrunners. Between 2018-2020, the 5 biggest tech companies and a famous auto manufacturer which offers insurance services added almost 2.5 times the total market capitalization of the 30 largest insurers globally in 2020.
By the end of 2020, the total market cap of listed InsurTechs surpassed $22 billion . InsurTechs are fast becoming the investment du jour, with a range of investors supporting and enabling the wave of flowing capital. Opportunistic venture capitalists and private equity partners are deploying early-stage capital. While reinsurers are actively playing two critical roles: enabling InsurTechs through investments and providing essential underwriting capacity.
CARE becomes the industry secret sauce
The COVID-19 pandemic catalyzed customer intention to purchase insurance (up by 7%) and increasingly, policyholders are gravitating towards insurers that offer better ‘CARE’, where Convenience, Advice and Reach are at the heart of designing and evaluating the effectiveness of their customer journey. Today, policyholders no longer waver when it comes to dropping a provider in pursuit of more relevant CARE solutions provider. For the first time, 50% of customers today are willing to consider coverage from a new age player.
“The insurance industry is evolving, the keyword for its future is modularity. Insurers must be prepared to tackle a broad range of future scenarios. Modular offers, systems and organizational structures will be indispensable to creating a robust and responsive value change. In the coming years, industry players will be defined by their strength within a hyper-specialized value chain, and insurers will increasingly become orchestrators,” said Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member.
“As traditional insurers expand their ecosystems to remain competitive, they must increasingly consider the value achievable through trusted partners, including BigTechs, InsurTechs and non-traditional players like original equipment manufacturer (OEMs). The numbers clearly suggest that exponential InsurTech growth is here to stay, so delivering superior customer CARE is essential. Future success in the industry will depend on players’ existing capabilities across the value chain, willingness to invest, and desire to own the customer relationship,” said John Berry, CEO of Efma.
Be the first to comment