Almost half of insurers fear that up to 20 percent of their business could be lost to standalone financial technology companies within the next five years, according to a new PwC report.
The report, Opportunities Await: How InsurTech is Reshaping Insurance, also found that annual investments in insurance technology start-ups have increased five-fold over the past three years, with cumulative funding reaching $3.4 billion since 2010.
It was also noted that 68 percent of insurance companies say they have taken steps to address the challenges and opportunities presented by financial technology companies.
Stephen O’Hearn, global insurance leader at PwC, commented: “Insurers need to encourage a culture of innovation and creativity within their organisations to ensure that the progress being made is not squandered.”
“There is a risk of missing an opportunity to deliver customers a similar experience to one they already receive from retail and technology companies. One size simply does not fit all in insurance anymore and, by working alongside insurtech companies, companies can begin to reposition themselves at the cutting edge of customer interaction.”
PwC highlighted four steps that insurance companies can take to make the most of insurance technology companies. These include exploration, strategic partnerships, insurance technology involvement and new product development.
