Disruption’ is a common buzzword in many sectors of the modern world, and InsurTech is no exception.
Emerging technologies and startups position themselves as disruptors; facing down legacy systems with a combative, David versus Goliath mentality. The insurance incumbents are seen as representatives of a stodgy status-quo. If the InsurTechs are to gain notoriety, demonstrating their innovative potential outside whitepapers – it must be by taking them down.
We don’t think so. This narrative is misguided. Innovation doesn’t call for conflict between the worlds of insurance and InsurTech. It calls for collaboration. A mutually beneficial approach, with each side benefitting from the expertise of the other.
Ryan Hanley rightly said that InsurTech and insurance firms are “fighting the same battle: the insurance customer experience. Combative rhetoric creates unnecessary friction. Incumbents need Insurtech. Insurtech needs the incumbents.“
Increased specialisation has produced enormous gains in productivity over the course of human enterprise, and this principle is as valid as ever. The incumbents have accumulated a stock of expertise, knowledge, and working practices which InsurTechs would find fiendishly difficult to replicate on their own. Similarly, insurance firms often lack the technical knowledge to be confident in their capacity to keep up to date, or innovate, in the digital arena.
It simply makes more sense for both to work together, since each benefits from the other’s specialism.
This is not a new insight. A survey of UK MGA’s has found they have increasing interest in working with InsurTech to help them become more customer-centric. And as we noted in our previous Insights article, ‘What’s next in insurance?’, KPMG’s report, ‘Accelerated evolution – M&A, transformation and innovation in the insurance industry’, revealed that insurance executives are actively seeking new acquisitions and partnerships so they can benefit from the expertise of technology firms.
These professionals have recognised what David Haass pointed out in a recent Forbes article: ‘The insurance companies that move swiftly and decisively are most likely to be the insurance companies that flourish. The top companies will be those that lead innovations in digital technologies.’ Furthermore, they recognise that collaboration with InsurTechs is an efficient way to move towards that goal.
And on the other side of the aisle as well, according to PwC’s report Breaking Boundaries, ‘the narrative surrounding InsurTech has shifted. We have moved from the expectation of disruption towards collaboration.’
Switching the Narrative
Our goal shouldn’t be to conflict with each other, or to threaten each other’s jobs. Our respective fields are perfectly tailored to making each other’s professional lives easier. It’s positive to see narratives shifting from the combative rhetoric of disruption to the collaborative approach of mutual benefit from, and respect for, what the other side brings to the table.
Buzzwords inevitably lose their shine. ‘Disruption’ is heading that way, as those of us who recognise the profound business benefits of partnership are increasingly turned off by the David vs Goliath narrative.
At iXledger we believe in collaboration, not disruption. For collaboration opportunities you can contact us here.