Over 86 percent of insurers in CE believe that cooperation with insurtechs may support their technological development

Insurance companies tend to invest more in technological development. They are happy about their cooperation with insurtechs and do not want to resign from it; as many as 74 percent of insurers declare to have positive experience of such cooperation.

Recently firms that offer technology solutions in the financial sector (fintechs) have supported development of the banking sector. As part of the survey called „A Positive Partnership. Central European Insurers and Insurtechs: challenges, opportunities and trends” , carried out by Deloitte, experts from Actuarial and Insurance Services Team took a close look at the insurtech market. The survey authors analysed the recent cooperation between insurers and insurtechs, new solutions and market perspectives for the years to come.

The research was conducted in 2022 in the form of two online surveys addressed separately to insurtech companies and to insurers from Central Europe (including Romania).

Fruitful cooperation

According to the survey, as many as 70 percent of insurers in the CE region have recently commenced cooperation with insurtechs. Most of those who have not decided to do so yet indicated lack of resources and funds as the key challenge (seeming to be aware of potential benefits of such projects).

Their opinions regarding the completed projects are highly positive; 74 percent of insurers are happy with the cooperation. Even firms not satisfied with their former cooperation with insurtechs (mere 8 percent) still see benefits and necessity of collaboration despite their negative experience. Insurtechs demonstrate similar opinions concerning the shared projects: 65 percent are satisfied with their cooperation with insurers, with mere 7 percent unhappy about it.

Greatest challenges

According to insurtechs (61 percent), the scarcity of funds assigned to innovation poses the biggest challenge in cooperation with insurers. As perceived by insurers, key challenges include restrictive regulations (57 percent) and the need to adjust the offered solutions to the existing IT infrastructure (57 percent). Too high expectations of insurtechs were indicated by 41 percent of insurers.

Prospects for the future

Clients’ expectations pose a growing challenge for insurers, as they want more attractive offers, more personalised products and services, simpler procedures and faster service. Insurers see the issue and indicate growing client satisfaction and retention as key success indicators of projects performed in cooperation with insurtechs (59 percent of respondents). Insurers do not limit the project success concept to finance, which is of crucial importance, as it demonstrates they want to benefit not only from reduced costs or increased sales, but also from additional aspects they consider equally important, such as competitive advantage, brand recognition gained through innovation or improved efficiency of routine operations.

For more information, download the report here.