Operational gaps in insurtech platforms

As the CEO of an #insurtech company, I am constantly evaluating how we can leverage technology to drive meaningful change in the #insuranceindustry. Capgemini's "World Property and Casualty Insurance Report 2024" sheds light on a pressing issue: 92% of insurers are struggling to bridge the gap to #underwriting excellence! 🔍 Key Findings: - Predictive Analytics: While 83% of executives recognise the importance of predictive models, only 27% have implemented them - Data Integration: 70% of trailblazers effectively integrate third-party data, compared to just 12% of typical insurers - Optimised Workbenches: 65% of leading insurers have mature underwriter workbenches, versus 19% of others - Sales Enablement: 78% of top performers use underwriters as sales enablers, compared to 36% of mainstream insurers 📊 Challenges and Solutions: - Data Mastery: The report highlights a critical lack of data mastery, with 73% of insurers facing pricing precision issues and 70% struggling with inconsistent underwriting decisions - Technology Trust: Only 43% of underwriters trust their automation tools, a gap that needs bridging for effective transformation 🛠️ Actionable Insights: 1) Connect the Data Dots: Investing in data lakes and AI-driven projects is essential, but success hinges on overcoming #data silos and legacy system limitations 2) Unlock Insights: Modern core systems and predictive #analytics are pivotal for extracting actionable insights that align with business goals 3) Evolve the Underwriting Role: Reduce administrative tasks to free up underwriters for growth-focused activities, thereby enhancing productivity and customer experience 🌟 Real-World Examples: - Allianz & Cytora: Collaborating to drive AI-powered risk processing - Zurich Insurance & Quantee: Blending traditional and AI-driven pricing techniques - Esure: Re-platforming with MACH-architected systems for superior performance 🔗 Collaborative Transformation: Success requires the right partner who doesn’t just want to offer the next consulting project or shoehorn their existing technology onto your problem. Instead, you need a partner who sits in your corner, combines your insight and knowledge with their external network and experience and suggests solutions (be that buying or building technologies, connecting with the right knowledge owners or a combination thereof)systems. By focusing on connecting data, unlocking insights, and evolving the underwriting role, insurers can transition from being mainstream to trailblazers. This isn't just about adopting new technologies; it's about reshaping the entire underwriting process to drive better business outcomes. For that reason, it might make sense to ask for some shortcuts and insights into what has worked and hasn’t so far. Let's transform underwriting together and lead the industry towards a future of #insuranceinnovation and excellence. Get in touch if you want to discuss this in more detail! ⬇ Report linked in the comments

💣 In for a contrarian view: "#Insurtechs fail at scaling #microinsurance" That’s according to research by Yannick Perticone and Jean-Christophe Graz, recently published in Cambridge University Press. The authors argue that Insurtech’s promises fall short of expectations because of the contradiction between the principles of platform scalability and insurance risk pooling. ___ Here's what the authors argue in this paper: Insurance is based on pooling risks, whereas insurtech platforms are often premised on unpooling risks. These two opposing forces create a challenging case for insurtech as a viable enabler for microinsurance. The study highlights three key dimensions of digital insurance that, while central to insurtech platforms, may also hinder their success: 🔗 Interoperability Insurtechs rely on data from other parties, such as MNOs. Due to data protection regulations and practices, the data they receive is often limited, which could result in mispricing of insurance solutions. 💴Valuation Platform owners collect data for specific purposes, which may not be sufficient for accurate risk pricing in insurance. This mismatch between the data needed for risk assessment and what is actually available may lead to incorrect pricing and, ultimately, incorrect premiums. ⚛️ Aggregation Insurtechs atomise risk pools, breaking them into smaller segments to facilitate precise risk profiling. However, this reduces the pool size, undermining the fundamental principle of insurance as a solidarity risk-sharing mechanism, which may lead to higher, not lower prices. According to the authors, these three challenges make insurtechs an unlikely solution for the growth of inclusive or microinsurance. _____ ⁉️ Do you agree? This is certainly one of the more thought-provoking views I’ve shared here. While I may not fully align with the author’s conclusions, I believe it raises important points worth discussing. I’m eager to hear your thoughts and learn from your perspectives. 𝘛𝘩𝘦 𝘩𝘪𝘨𝘩𝘭𝘪𝘨𝘩𝘵𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘳𝘦𝘴𝘦𝘢𝘳𝘤𝘩 𝘱𝘢𝘱𝘦𝘳 𝘢𝘳𝘦 𝘮𝘪𝘯𝘦. 𝘈 𝘭𝘪𝘯𝘬 𝘵𝘰 𝘵𝘩𝘦 𝘴𝘰𝘶𝘳𝘤𝘦 𝘪𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴. ━━━━━━━━━━━━━━━ 🤝 Hi, I'm Bert. I'm passionate about staying up-to-date with the latest in #microinsurance. I'd be delighted to connect and exchange insights with you. 🚀 With the annual Microinsurance Master Master accelerator program, we are on a mission to help organisations thrive. Join us in March 2025 to make a difference in the business of reducing the risks of low-income communities. ⠀

One insurance gap almost wiped 40% off this insurtech's valuation overnight. Here's how we helped their CFO… The call I got from their CFO was one we get multiple times a year. They now needed deeper expertise. Like many funded startups… They put a basic insurance program in place during their friends & family round. Box ticked. Rolled it through their Series A. Three years later: In the market for a new capital raise. A matured digital I platform serving thousands of customers, and partnerships with several sizeable banks. But their insurance program was still stuck in 2021. Their risk management framework and insurance coverage were speaking different languages. And one insurance savvy investor flagged a gap during due diligence that left a major exposure unchecked. From a 30k view… Here's the insurance framework we helped them design to protect their Series B valuation: 1. Cyber Insurance → ransomware/extortion limits → tech platform interruption calc 2. Technology E&O → software failure coverage → customer data handling errors 3. D&O for Tech Companies → IPO/funding round protection → regulatory tech compliance 4. Coverage Adequacy → tech platform exposure limits → API/integration gap analysis 5. Regulatory Tech Insurance → fintech compliance coverage → digital insurance regs 6. Cost Optimization → insurtech market benchmarking → startup growth scaling costs 7. Data Liability → AI/ML decision coverage → data privacy protection 8. Policy Terms for Tech → API failure exclusions → cloud service interruption 9. Property Insurance → server/hardware protection → remote workforce coverage 10. Risk Management Services → cybersecurity programs → tech incident response 11. Emerging Tech Risks → blockchain exposure → AI liability assessment 12. Coverage Integration → legacy vs digital coverage → partner API protection 13. Claims Process → digital claims handling → real-time reporting systems 14. Policy Documentation → digital certificate system → API-based policy mgmt 15. Market Conditions → insurtech capacity limits → digital insurance trends 16. Regulatory Compliance → fintech licensing reqs → digital compliance reporting 17. Risk Transfer Alternatives → parametric solutions → micro-insurance platforms 18. Coverage Triggers → digital incident definition → automated notice systems 19. Insurance Program Structure → tech platform coverage → startup scaling structure 20. Specialized Tech Needs → open banking exposure → digital payment protection 21-25 Cont in comments… P.S. if you like this post you’ll love our newsletter. Every Friday we flag the top three articles impacting the global insurance markets. It’s for busy executives that want to stay current on the market…