InsurTech earmarked as growth goldmine

Insurance technology (InsurTech) and the on-demand economy have been listed as burgeoning spaces for insurers in Aon’s annual Global Insurance Market Opportunities (GIMO) report.

The study highlighted that Insurtech could be an “enabler rather than a disruptor” of the traditional insurance model. The fast-growing entrepreneurial Insurtech segment may have a more supportive role for insurers than previously thought via “open architecture innovation”, Aon’s report stated.

Singapore is also becoming a hotbed for Insurtech in Asia, with the city-state’s access to quality talent attracting start-ups like Bandboo that are reinventing how customers interact with insurance companies, purchase products and create new markets, found Aon.

The report revealed that three of the leading areas where analytics can help with insurance industry growth – cyber risk, casualty catastrophe risk and pathogen risk – could become increasingly insurable through collaborations with Insurtech companies, and technology and analytics providers, thereby opening up new opportunities for insurers and reinsurers.

Meanwhile, the on-demand economy (ODE) is apparently presenting both an opportunity and a disruption to the traditional insurance sector. This is happening through the requirement for a greater range of time-based insurance products that recognise that assets such as cars and homes are increasingly used on both a commercial and personal basis – driven by services such as Grab and Airbnb.

The 2017 GIMO report also revealed that the handling of cyber risk is moving beyond traditional insurance, and that a typical cyber insurance policy should now offer access to a panel of service providers for incident response and additional services.

“We know that the insurance sector is facing challenges in the current macroeconomic environment, so we should expect leading organisations in the industry to drive change,” said Paul Mang, Aon’s global CEO of analytics.

“We are already using technology to make us more efficient as a sector, and to expand into emerging risk markets. However, the true transformation will happen as we re-imagine risk management altogether.

“In this new environment, collaborations, or what we call open architecture innovation, will be key to creating net new growth,” added Mang.