A report from Ernst & Young Australia (EY Australia) and Insurtech Australia has found Australia’s insurance technology (insurtech) sector has significantly grown over the last year, with the number of companies involved in the market increasing by 53 per cent.
Internationally-founded insurtech companies that had entered the Australian market had contributed to this growth, accounting for 30 per cent.
Andrew Parton, partner at EY Australia, said Australia’s insurtechs had been playing an increasingly important role in the future of incumbent insurers, particularly in the health and life insurance markets.
“In the last year, we’ve seen collaboration between incumbents and insurtechs – one of the major impediments last year – increase significantly, with a 75 per cent increase in active partnerships,” Parton said.
“While the majority (72 per cent) of insurtechs are now collaborating with incumbent insurers, it’s now about making that collaboration more impactful.
“The research found that only 18 per cent of insurtechs believe incumbents are currently doing enough to collaborate with them in order to truly drive industry innovation.”
Simon O’Dell, Insurtech Australia chief executive, said Australia had been fast becoming a global centre for insurance innovation, which had been demonstrated by the rapidly increasing size of the insurtech ecosystem.
“Both locally founded start-ups, and international insurtechs looking to scale internationally now recognise our local market as a springboard to global markets, in particular the US,” O’Dell said.
“We have all the major international insurance companies in this market, but the market is small enough for big companies to be agile, embrace innovation, and make decisions quickly.”