Insurance incumbents not embracing innovation, report says
Insurance industry incumbents are not embracing start-up innovation fast enough, according to a new report from Ernst & Young Australia.
The report, “Insurtech: Enabler or disruptor?” was produced by EY in collaboration with insurtech Australia and examined the country’s emerging insurtech ecosystem for the first time.
It found that even though the average age of an insurtech company in Australia is only three years, 83 per cent are already operating in New Zealand or other overseas markets.
“The insurance industry value chain is undergoing a period of profound change, driven by evolving customer expectations, emerging technologies and sustained pressure on margins,” said Andrew Parton, a partner at Ernst & Young Australia.
"In this environment, Australian insurers have a significant opportunity to embrace the benefits of insurtech to deliver better customer experience and greater value.
“However, in order to fully realise the benefits, there will need to be increased collaboration between incumbents and new entrants.”
This was a view echoed by the insurtechs themselves, with 65 per cent of insurtech organisations surveyed saying they were enablers of the insurance value chain and 25 per cent saying they complemented the existing value chain.
Only 10 per cent of insurtech respondents saw themselves as disrupting and challenging the status quo, the report said.
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