After an exceptional year in 2021 in terms of fundraising and a slowdown in 2022, what is the outlook for theinsurtech ? We went to meet Nelly Brossard, Vice-President of theassociation Insurtech France to understand the major trends that should be at work in 2023 in Insurtech.
Nelly Brossard, is Insurtech still in a positive dynamic or can we see signs of a slowdown?
The dynamic of Insurtech is still very strong. Even if in the middle of 2022 the amounts of fundraising fell sharply (vs. 2021), we observe that the number of fundraisings continued to increase (+ 10% vs 2021). Most Insurtechs (more than half) focus on distribution, for example neo-brokers like +Simple, Lovys… They bring simplicity, transparency, fluidity, restore the customer and the customer experience in the center based on theAI (Artificial Intelligence), data and personalization, and that does our sector a lot of good… Beyond distribution, Insurtechs are positioned across the entire insurance value chain: pricing, fraud detection, compensation, the customer relationship, reinsurance. And this across all product lines and markets.
According to you, what are the fundamental trends in the world of Insurtech?
It is possible to distinguish several key trends:
the development of Insurtech related to “products” and in particular products for hedging “new risks” such as cyber insurance or mobility.
insurance offers for VSMEs/SMEs. Great potential for growth. Technology makes it possible to adapt contracts and services according to the specific and heterogeneous needs of VSEs/SMEs in a scalable and efficient way.
the strong growth of on-board insurance. With insurance offers integrated into sales journeys/processes, when customers are most concerned about risk, i.e. when purchasing a product, service , instead of selling them ad hoc. The explosion of the “embedded” phenomenon is there. The technology is mature, thanks to APIs. This affects retail and e-commerce, and also financial services, leisure and health.
the development of open insurance. This makes it possible to open up an insurer’s resources (customer data, offers, etc.) to third-party companies and much more interoperability, innovation and flexibility of offers. It is thus possible to launch innovative products on the market, with elements from multiple partners, to take advantage of new distribution channels and data available in open data; for the end customer, open insurance brings more transparency in the offers, and more personalized products, and in a multi-channel approach.
the growth in the use of parametrics (or index insurance). Unlike conventional insurance, which covers the losses actually caused, this sets upstream the parameter(s) to be achieved (one or more objective parameters): for example a climatic index (temperature, rainfall), a duration (delay on a flight)… ) and a lump sum and contractual amount to automatically lead to the payment of compensation to the insured when the parameter is reached (example outside temperature or cumulative rainfall). It is possible to cite Moonshot Where Descartes Underwriting.
the development of “resilient” offers. Climate change is a challenge for everyone, where insurance has a special role to play, particularly through better risk management. the development of offers centered on risk prevention, using in particular connected objects (IOT), particularly in the automotive, home, agricultural and health sectors. In this respect, it is possible to cite LukoDatafolio, Drivequant…
In your opinion, how will Insurtech position themselves in the years to come?
Insurtech is a driving force and a strong and key vector of innovation that irrigates the entire insurance ecosystem, with a logic of collaboration with insurers. Far from disappearing, these players will continue to play a major role in innovation.
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