Insurtechs can play a vital role in supporting, complementing or refining the value proposition, business initiatives and goals of life and health insurers. These forward-thinking companies offer new and innovative products and services to improve the customer experience, improve process efficiency, reduce costs, facilitate advanced data analysis, and more.
Insurtech’s offerings run the gamut, from evidence-based and cost-reducing online mental health programs to banking services that include customers’ carbon footprints, to new business and distribution models that can facilitate and expand insurer coverage for uninsured and underinsured groups. population.
As with any third party provider, the right insurance technology partner can drive an insurance company’s strategy, tactics, products, services and results. However, the wrong partner can drain resources, waste time, and produce little to no desired results.
Choosing the right insurtech partner should not be taken lightly. This includes entering complex and noisy environments. Fledgling players, ill-conceived approaches and ideas, and insufficient road testing abound. Evolving nomenclature and dodgy marketing can also be confusing, making it difficult to compare insurance technologies on an apples-to-apples basis.
Fortunately, the best methods for evaluating and selecting partners are becoming clearer. Here are five important considerations that insurers should pay attention to:
- Formulation of the problem: Insurer should be clear about a business problem or problem that an insurtech partner needs to solve. Lack of clarity can lead to problems in the selection and implementation of partners.
- Executive Sponsor: Does the insurer have an executive or business sponsor in the organization for a technology partnership? Identifying the sponsor at the start of the selection can help reduce performance issues.
- Market scan: The insurtech ecosystem is complex and requires a unique experience to navigate. Insurers often need help exploring the vast market landscape to find the best potential partners. Studying specific markets, ecosystems and verticals to identify differences between insurance technology players is the basis for developing a business case for partnering with a selected vendor.
- Internal features: Insurers must have a clear understanding of insurtech’s capabilities, how those capabilities integrate with their own, and their organization’s ability to maintain partnerships once the concept has been validated and put into production.
- Custom development options: While most partnerships require some level of customization, a partnership should not require insurance technology to make significant changes to the design of its products or services. If an insurtech needs to significantly change its approach or solution to implement a use case, this is usually a sign of non-compliance.
Partnerships with insurance companies can be beneficial for insurers. In order to find the right partner to help insurers achieve their business goals, it is necessary to carefully study the market and make sure they are a match for each other. Devoting time and resources to make sure the partnership is on a solid footing can help avoid costly mistakes and lead to strong, mutually beneficial relationships.