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InsurTech 2.0: Insights from our Nunatak Afterwork

InsurTech 2.0: Insights from our Nunatak Afterwork

It was the premiere of our exclusive event series: In a very relaxed atmosphere, our two managing directors Robert Jacobi and Rupert Schäfer opened the first Nunatak afterwork event. The hot topic of the evening: “InsurTech 2.0: Battle or cooperation?”. Around 40 guests from established insurance companies, start-ups and consultancies participated in the open discussion at the Nunatak office close to the “Siegestor” in Munich.

Rupert Schäfer emphasized the new role of InsurTechs in interaction with global players of the insurance industry: “Regarding the distribution and digitalization of existing business models, the first wave of InsurTechs started with high expectations. So far they didn’t get fulfilled, but they had a huge impact on the established insurers’ willingness to change.“ As an reaction to new actors, insurers are investing more and more in start-ups and founding their own innovation labs. But not everyone is successful: “It’s still hard for many established insurers to anchor new mindsets and workflows in their organisation.”

The real danger are tech titans like Amazon and Google

Meanwhile, many companies realised that InsurTechs aren’t the real danger in the competition for insurance customers of the future. Quite the contrary is actually the case: With strategic partnerships and common initiatives InsurTechs and established insurers can even complement each other. Thus, investments and M&A activities are increasing, too.

The Nunatak Afterwork in our Munich office
Nunatak Afterwork in our office with Rupert Schäfer (2nd from right)

The big unknown are “tech titans” like Amazon and Google. “Regarding to insurances and the digital interface with the customers, their future strategies are still not clear”, Schäfer said. “Among all the current threats – that’s what German CEOs have sleepless nights about.” And according to our Nunatak Update Paper “InsurTech 2.0”  they should be afraid: Already 30 percent of the people all over the globe would rather take out an insurance at one of the tech titans than at an established insurance company.

Why the disruption is a big chance for the insurance industry

The challenges of the digitalization were the main topic of the following panel discussion with industry experts like Stefan Daehne (ADAC Versicherung), Hermann-Josef Knipper (R&V), Klaus Driever (Allianz Deutschland), Frank Birzle and Maximilian Rast (ottonova), Simon Kolkmann (RYSKEX) and Matthias Mierisch (Speedinvest).

One important finding was that trust is a huge asset of big and established insurance companies with partly decade-long experience as well as brand presence. The new players couldn’t build up that level of trust yet – and it will get even harder for them in an increasing digital world with briefly, virtual touch points.

The participants also agreed on the assumption, that the unavailable disruption in the insurance industry is not only a threat, but also a chance: The industry is heading towards a co-existence of established and new actors – provided that the classical insurers administer to the change process. It’s short-sighted to hide behind the regulating lawmakers.

Rupert Schäfer’s conclusion: “Evenings like this and our talks with insurers and investors show that the digitalization of the industry is not fully developed and customer-orientated implemented yet. With other words: The game has just begun.”

The next Nunatak Afterwork is already in the planning. Details are coming soon.

Insurance sector: “Huge differences in mindset”

Insurance sector: “Huge differences in mindset”

Many experts predicted an earthquake in the insurance industry through InsurTechs, but this has failed to appear. Collaboration instead of disruption is the new leitmotif.

Our new update paper InsurTech 2.0 outlines the ongoing reorganization in the insurance market: increasingly, there is a close alliance between the established insurance groups and the innovative start-ups. Our Managing Director, Rupert Schäfer predicts how things will continue in the future.

Rupert SchaeferAre InsurTechs still the biggest threat to insurance companies? Rupert Schäfer: No, on the contrary. They have helped and continue to help the industry tremendously to stay future-compliant.

What do you mean exactly? When the first 2012 start-ups took up the subject of insurance, some managers in the established corporations were afraid of disruption. They were thinking about Amazon and the book trade. And they knew: they are the book trade. So they invested hundreds of millions in all sorts of digitization initiatives to stay competitive. This was urgently needed, the insurance sector was lagging behind others, and in that sense, the incumbents can be grateful to the InsurTech.

Disruption did not take place: so InsurTechs failed? If you succeed in determining whether a start-up will significantly decrease market share for major players, then InsurTech will not be successful. Disruption as in the music industry, where MP3 and streaming have replaced the CD, has not yet taken place. Nevertheless, the expectations of InsurTechs for business model innovation have been high. The number and size of investments in this sector has increased steadily since 2016. Established companies are involved in strategic partnerships, knowledge transfer and securing their own ability to innovate.

Do these partnerships work? InsurTechs have recognized that as strategic partners of large companies, they have much better opportunities. After all, they have simply not been able to attract enough customers to this day. What they can do better than incumbents are fast agile development processes and radical thinking from the customer perspective. Now, that has to be transferred to incumbents and thus to the customer.

Will it work? The art will be to cope with the huge cultural differences in mindset between corporations and start-ups. This process takes time and patience. Anyone who does not take this seriously and does not accompany its company with a sustainable change management process will end up frustrating everyone: long-established IT staff to younger staff with beards and wool hats.

Curious? Click here to view the latest update paper, InsurTech 2.0!

InsurTech 2.0

InsurTech 2.0

Update Paper: InsurTech 2.0 – Deconstructing the Buzzword

The insurance ecosystem is facing its biggest disruption ever. InsurTechs, data-driven tech startups, are entering into the market. Innovations such as machine learning, big data, IoT and blockchain are in focus. And the second wave of new competitors is about to follow: tech giants like Amazon or Google. Traditional insurers are looking for new business models and working on their digital-readiness – by integrating investment units and innovation laboratories, e.g. However, they are still having a hard time. In other words, the game has just begun.

Read the entire paper