How will insurers be affected by the growing consolidation of tech start-ups? Here are some likely outcomes, according to Accenture:
- Opportunities for insurers to collaborate with, and invest in, innovative insurtech firms will shrink as emerging tech firms mature and align themselves with big partners.
- Insurers that have already cemented strong ties with tech start-ups, through partnerships and funding, will amplify their first-mover advantage by rolling out digital distribution and back-end solutions that competitors will struggle to emulate.
- A few insurtech fir
ms will gain critical scale and market influence by merging with other start-ups. This will increase significantly the strength of their . research, marketing and sales and as well as their ability to remain independent from major insurance providers.
- Closer relations between insurtech firms and big insurers will not always succeed. Likely stumbling blocks include the unwieldly organizational culture of many major insurers as well as the loss of focus among some insurtech firms acquired by bigger partners.
“The insurtech landscape will change substantially in the coming year,” John Cusano, Accenture’s Senior Managing Director of Global Insurance writes on the firm’s Insurance blog. “Traditional insurers should move quickly to deepen their relations with key start-ups to ensure long-term access to innovative digital technology and new business models.”