The EY 2019 Australian insurtech ecosystem report shows that insurtechs are helping incumbents develop innovative insurance products and deliver better services.
Our 2018 report found Australian insurtechs are predominantly enablers rather than disruptors of transformation. In 2019 we asked two questions: “Where are insurtechs enabling transformation along the insurance value chain?” and “What’s stopping incumbents from taking advantage of these exciting opportunities?”
Australia’s insurtechs are maturing and growing. They are playing an ever more important role in the future of incumbents, especially in the health and life insurance markets. Focused on supporting product and distribution innovation, pricing and underwriting agility, smarter loss prevention as well as organisational efficiency, insurtechs hold the key to helping incumbents accelerate their transformation to become digital insurers.
Whilst incumbents understand the potential of insurtech innovation, uptake remains inhibited by operational constraints, legacy systems, technological readiness, compliance issues and concerns over customer privacy and security.
Reinforcing the view of last year’s report, the clear majority of insurtechs are focusing their business on enabling incumbents, with relatively fewer attempting to disrupt the industry. More and more active partnerships are springing up between industry incumbents and insurtechs, yet 82% of insurtechs believe incumbents can do more to collaborate and truly drive innovation.
This report looks at what’s inhibiting stronger collaboration and the broadening areas of the incumbent value chain where insurtechs are focusing. It paints a picture of an industry with substantial opportunities to disrupt itself with innovative products, compelling customer experiences and deeper sources of value. However, without considerable effort on both sides, the needed collaboration to achieve these goals will continue to be stymied. Incumbents must proactively remove the barriers to working with insurtechs and insurtechs need to better understand the realities of operating compliantly in Australia’s insurance industry.