The insurtech sector is one of the fastest growing sub-divisions of the fintech movement. Indeed since 2012, insurtechs have attracted $2.5 billion in early stage capital and there are over 250 companies in the general insurance segment alone.
The boom in insurtechs started three years ago. The popular image is of the insurtechs who are out to disrupt the established insurance market with digital products that cut out traditional insurers and brokers.
Like their bigger brothers in banking fintech, disruption was the insurtechs’ original mantra.
However, there is a dawning reality that scaling up an insurtech start-up, or unicorn, to compete for customers on a massive scale is super difficult. There are some immovable obstacles to be dealt with. Regardless of how digital and agile an insurtech believes it is, there are legal and regulatory hurdles that are hard to overcome. To move ahead in 2019, insurtechs need strategies to deal with these.
Some of the most disruptive insurtechs are those who seek to seize customers from traditional insurers. You could term these as digital attackers and several of these will survive. It is notable that these challenger, independent digital insurers are installing traditional insurance industry veterans to lead their operations for next year. These are exactly the right guys to get over the regulatory hurdles.
The main development in the insurtech sector will be how insurtechs make serious efforts to be more attractive, not disruptive, to the insurance establishment. Insurtechs are realising that collaboration with the establishment is critical to their success because traditional insurers have done the hard work on customer acquisition, statutory capital, and regulatory compliance. And what is more, the establishment insurance companies are in the market for insurtech innovation.
Successful insurtechs will be those who fit into different parts of the insurance customer lifecycle. These can be categorised as process improvers

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