Investing in insurtech technology requires a sound process that evaluates all current opportunities in the external market. Our team has worked with many corporate clients as well as insurtech startups – and we understand the necessary steps to ensure a thorough examination of any potential investment. Does your organization have proper strategies in place that incorporate investment in high-tech and digital solutions?
To meet the demands of new and demanding customers, organizations continue to automate processes in order to become more efficient. This is nothing new, but over the last year we’ve heard an increased panic in our client’s urgent requests to go “to the cloud” or “digitize everything”! First of all, we do our best to calm them down so they don’t hurt themselves or others… but then, we move quickly to heed their own best instincts to prepare for change.
A key reason for this urgency is the increase in insurtech startups and other technologies that focus on process automation and improved customer experiences. Decisions to incorporate high-tech solutions should be established based on the degree of innovation that the new products/services bring to the table. Innovation can be categorized three ways: enabling innovation, sustaining innovation, and disruptive innovation.
How can insurers incorporate new innovations into their digital strategy?
Insight can be gathered from observing insurtech startups that are low in capital but have sustaining innovation (improving existing products/services) that could be beneficial to your organization. Information can be gathered regarding customer base, business model, and means of value creation.
Bâton Global has expertise in evaluating insurtech startups and gathering appropriate information to develop an industry analysis.
Insurtech startups with sustaining innovation and higher capital pose great threats for more established organizations in the insurance sector. Because of the insuretech’s ability to quickly scale due to greater capital, they have a stronger ability to disrupt the industry and gain market share.
Organizations should develop a plan to deal with competing insurtechs, ensuring their marketshare is limited. Established organizations typically have an advantage in this situation as they have a strong hold on the market and are high in capital.
Disruptive insurtechs show innovative technologies that have the potential to impact the market landscape. Those that have limited capital pose less of a threat than those with higher amounts of capital, and could present the best opportunities for investment.
Research-based analysis provides insight and analytics for your organization surrounding high-tech and digital innovation (link to Research). Comprehensive research is needed in order to determine which insurtech company is the correct addition for your organization.Furthermore, organizations should consider the complementarity of these investments with respect to product, process, and culture. If it isn’t right… it just won’t work. Do you have a team in place to deliver research-based analysis?
When insurtech competitors establish disruptive innovative capabilities that your organization doesn’t currently possess and these competitors are well funded, the option of direct investment no longer exists. Your organization should pursue development of disruptive technology within your organization.
The pursuit of high-tech development is a difficult undertaking, but can be pursued using a structured management system. Bâton Global has found that implementing these systems as early as possible encourages collaboration and innovation among employees.
Bâton Global has provided clients insight into digital transformation and automating existing processes in pursuit of becoming more efficient and customer focused. Insurtech startups have begun to disrupt the insurance sector, causing all organizations to look at their high-tech and digital initiatives.