Driving insurtech growth through clear strategy is the best way to expand and make the most of investment funding. We list FIVE steps to scale success
Investors are keeping a close eye on the burgeoning insurtech sector and putting their faith in an industry with limitless potential. However, with so many start-ups vying for investment, ensuring that a business has the correct growth strategy is critical. We look at five key methods that insurtechs should consider while scaling up.
1) KYC in insurtech is essential
Only 2% of the global insurance market is classified as insurtech at the moment. That means 98 percent of businesses are still using antiquated legacy systems that can’t keep up with the demands that customers have come to anticipate. Insurtechs have the advantage of being able to provide items quickly and efficiently, as well as keep in touch with customers via mobile technologies and apps. However, any insurtech company must make effective use of client data and understand which services are the most popular. Although the market is small, the competition is already fierce. Prioritizing KYC data should be a vital aspect of any scaling strategy. This should also include future projections for new products and services that the company intends to offer.
Indeed, a recent survey of more than 15,000 global consumers by Cover Genius found that over 40% of travellers plan to switch providers from their previously purchased travel insurance, indicating a disconnect between traditional insurance providers’ offerings and the needs of their customers.
2) Insurtechs must focus on delivering faster, better products and services
Every genuinely successful insurtech company is built on innovation, which is primarily driven by technology that provide high-quality services. Streamlining internal procedures and working in a lean and agile manner can help a firm deliver services faster and adopt new technologies that provide relevant solutions for its consumers. According to a recent McKinsey report, insurance companies have the ability to automate 50 to 60% of their back-office operations. Some insurtechs are coping by fast developing new service models in collaboration with other insurtechs and technology firms.
3) Insurtech should identify suitable partners within the ecosystem
Because technology and offerings are evolving at such a rapid rate, insurtechs should determine which partnership firms are best suited to assisting them in scaling and driving forward growth. Taking things to the next level may necessitate collaboration. The wrong collaboration, on the other hand, might be disastrous. All aspects of the business should be investigated from a legal standpoint. This includes the partnership’s length, expectations, and security strategies that could have an impact on both organisations if one is a victim of cybercrime, for example. According to studies, whether a relationship fulfils a specific business need and use case is one of the most important determinants in its success. Insurtechs must ensure that there is a clear link between the two.
4) Insurtech need to plan around KPIs
Setting the correct goals from the start will assist guide the rest of the strategy conversations in the best possible path. Consider the correct partnership firms, look at which new products and services are being launched, and whether new technologies are appropriate for adoption based on those products and services, among other KPIs. Experts believe that without a clear grasp of important goals, businesses risk trying to force tech solutions to fit instead of seeking out a partnership that can provide the right solutions from the start.
Insurtechs can achieve a 60 percent faster time to market delivery time if they develop a collaboration that is aligned with their goals, according to a Capgemini study. It can be difficult to measure the success or failure of an insurtech investment if corporations fail to establish critical success markers.
5) Insurtechs must have a clear scaling plan
Insurtech solutions, according to Efrat Sagi-Ofir, Co-Founder and Chief Revenue Officer at Air Doctor, should be scalable. “Startups and scalability should go hand in hand,” she explains. When the parties move from pilots and testing to expanding the solution for a larger rollout, these collaborations frequently fail. Solutions can fail at scale for a variety of reasons, including technology, infrastructure, and the nature of the business model.”
Insurers intending to partner with an insurtech to increase their digital presence, as well as insurtechs looking to scale by working with an incumbent, should start with a pilot programme before making any final decisions. Pilot projects indicate potential stumbling blocks, which can then be addressed promptly and effectively without risking investment loss. They can also fine-tune the scaling process to make it significantly more effective after the plan is fully implemented.
