Oliver Wyman is out with a report on the emerging Insurtech sector. Oliver Wyman is a global management consultancy operating in 30 different countries. For this specific report, they partnered with Policen Direkt Group in Germany, an insurance technology firm.
The authors believe that the first wave of Insurtechs brought forward a lot of activity but little real disruption. They are predicting a second wave that is far more sophisticated and will truly distrupt the way insurers cover and manage risk. The report says the toughest time for traditional insurance providers is yet to come. On the flip side, they are expecting a brighter future for both Insurtech startups and consumers.
“InsurTech has become a hot topic for founders, investors and insurers,” said Dietmar Kottmann, Oliver Wyman partner and co-author of the report. “InsurTechs have already impacted the insurance industry globally and triggered a lot of change – often to the advantage of the consumer.”
So what is in the report?
Entitled, “Insurtech Caught on the Radar: Hype or the Next Frontier”, the authors believe there has been an analytical void in this sector of alternative finance. Their framework for appraisal breaks down Insurtech into Proposition, Distribution and Operations. Within these three different segments they have highlighted 19 distinct models.
Falling under Proposition, there are six different models: Low Cost, Situational, Community-based, From Insured to Protected, Risk Partner, and Digital Risks.
For Distribution and the selling of insurance, the report defines eight different categories: D2C (direct to consumer), Price Comparison Websites (PCW), Affiliate Integration, Corporate Platforms, B2C Online Broker/Value Comparison Websites (VCW), B2B Online Broker/VCW, Financial Partner, and Life Digitizers.
On the Operations side, there are five different categories: Digital Sales Enabling, Underwriting, Service and Administration, Claims Management, and Balance Sheet and Financial Resource Management.
The authors seek to determine which models are effective and which ones, not so much.
So will frenemies become partners? Is old insurance digital dust?
You may read the report embedded below. They do expect the next generation of Insurtech firms to be less polite and more aggressive or perhaps; “more creative and make more ambitious moves to shake up the industry.”