Much like the rise of fintech in Australia, insurtech presents a range of technology-related opportunities which highlight the need for traditional insurers to ensure returns on investments in innovation, according to Capgemini.
In the ‘Capgemini/Efma 2017 World Insurance Report’ released today, 31.4 per cent of consumers surveyed said their reliance on insurtechs was either exclusive or in combination with incumbents.
On the Australian front, Capgemini said local insurance companies would have to reinvent themselves to target tech-savvy millennials, who held more interest in technological solutions than previous generations and were the main push behind the growing popularity of insurtech solutions.
With that in mind, Capgemini executive vice president and head of insurance, Jack Dugan said incumbents would have to deliver innovative solutions, but still had the power to remain relevant.
“Increasingly, partnerships are being viewed as a welcome development in the ongoing effort to address the insurtech movement,” he said.
“Insurtechs can help incumbents overcome roadblocks such as ageing systems and paper-based processes, meanwhile, incumbents can help insurtechs face newcomer challenges like high customer-acquisition costs and a lack of risk management experience.”
Respondents within the report also said insurtechs offered better value for money, and more timely and efficient services, but that the complementary strengths of traditional offerings remained crucial to the insurance sector.
A total of 45.9 per cent of respondents said incumbents were needed for fraud protection, while 43.7 per cent cited their prowess in brand recognition, and personal interaction at 41.6 per cent.