Insuranceciooutlook

Facts Insurers Must Know Before Partnering with a Tech Startup

Insurance CIO Outlook | Tuesday, May 17, 2022

Insurers are eager to innovate, but their internal processes and systems are invariably their undoing. While internal processes play an important role in how insurance companies operate, these lengthy processes make integration difficult for insurtechs.

Fremont, CA: The startup economy is here to stay, and it is disrupting the insurance industry just as much as it is disrupting other traditional industries. Insurtech is gaining traction, with many startups introducing new products and services to the market, as well as improving customer experiences. The growing number of emerging insurtech startups eager to disrupt traditional insurance has alerted many insurers to the vast potential of collaboration – especially since many of these startups are proving to be better and faster at addressing consumer and business needs. But what should traditional insurers know before partnering with a tech startup?

Simplifying Processes and Systems

Insurers are eager to innovate, but their internal processes and systems are invariably their undoing. While internal processes play an important role in how insurance companies operate, these lengthy processes make integration difficult for insurtechs. According to a new study, insurance companies can potentially automate 50 to 60 percent of their back-office operations – and many insurers are overcoming this by quickly establishing new service models through partnerships with insurtechs and tech companies. This demonstrates that there is ample opportunity to make processes and requirements more transparent and simple.

Insurers should carefully plan and consider how they intend to innovate. No matter how traditional or modern the insurance company is, prospective partnerships of any kind would benefit from rethinking existing infrastructure and simplifying processes and systems across the board.

Identifying Key Business Challenges First

Traditional insurers considering insurtech partnerships should first identify key business challenges before looking for technological solutions. One of the most important factors in determining the success of a partnership is whether it addresses an identified business need and use case. Ensure that there is a clear link between the needs of the insurance company, the insurtech startup solution, and, of course, the key player within the traditional insurance company who will be in charge of implementing this solution.

Only by comprehending and prioritizing the company's issues can an insurer find the right partner – one who can help develop and deliver a solution that the organization requires and can integrate into its operations.

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