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Insurers must embrace innovation


Alain Castonguay

28 July, 2017 07:00

Henk Broeders | Photo : Alain Castonguay

The new entrepreneurs emerging in the insurance can inspire the industry to do better for less, says the consulting firm McKinsey & Company.

At the conference InsurTech Québec, held in early April in the framework of the Week digital of Quebec, Henk Broeders, senior partner of McKinsey, presented the report » InsurTech — the threat that inspires «. It was published in January 2017 by his firm.

The new technologies sector of the insurance has more than 2,500 startups that have raised capital totaling $ 5 billion dollars (G$) US. Some analysts argue that investors will not find their implementation. McKinsey, however, is not of this opinion.

McKinsey observes that 46 % of the startups are present in the property and casualty insurance, 33 % in health insurance and 21 % in life insurance. By combining the three segments of the business, the two activities most affected by the new technologies are the distribution (37 %) and underwriting risk (23 %). Some 40 % of these companies are the growth of the values of insurable employment, while 60 % of the startups are focusing their innovation on the reduction of costs.

Mr. Broeders lists several elements that explain the growth of new players with innovative insurance. The most obvious is their ability to enhance the customer experience. By scanning the trade, we accelerate the processing of underwriting and claims. These steps are often the most critical in the estimation of the value of the service offered by insurers, he said.

The new insurers which operate on the principle of coverage between peers, such as Friendsurance, Lemonade, Guevara or Inspeer, arrive to establish a commitment contract with their users that exceeds what is seen with other insurers. Another, Trov, providing cover for temporary and on-demand interacting much more frequently with users. They come in and to make them grasp the relevance of the insurance.

New players approach the insurance-based systems fully digitized, at all stages, quite similar to the insurers direct. In addition, instead of providing complex systems to process information, they use existing technologies to design their interface. They are using new technologies, such as connected objects, games, fun, robots-advice, tools, conversational, public databases, and artificial intelligence to better target the needs and customers.

Another feature that distinguishes them is their small size and their agility to find a market neglected by the insurers existing, as Slice has done in providing coverage to users ofAirbnb.

An offer majority to insurers existing

The portrait of McKinsey shows that 61 % of the startups in insurance are intended to provide a means for insurers exist to improve their service offering to consumers. Another block of 30 % threat indirectly to the distribution network by eliminating the middleman.


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