Looking across today’s financial services marketplace, nowhere are the opportunities for future disruption greater than in insurance.
Indeed, Strategy& analysis reveals that around £50 billion of revenue could be disrupted in the UK insurance market. And advancing technology—in collision with other enablers of disruption including regulation, customer switching and talent—is at the heart of this disruptive potential.
It isn’t hard to see why. With increasingly demanding consumers at one end of the value chain, and struggling legacy systems at the other, there’s a clear and urgent need for technology innovation in insurance. But where will it come from? As our new thought leadership report* highlights, the UK’s burgeoning InsurTech industry is ready and willing to provide the infusion of innovation that the industry requires. But to date, the flow has been merely a trickle.
Our report drills down into this disconnect by examining the differing perspectives of the main participants. InsurTechs see themselves as having the ability to help incumbents innovate and change, but feel insurers must be willing to partner more closely and openly for this to happen. Insurers are aware of the need to change, but are also unsure how best to interact with InsurTechs and daunted by the scale of the task. And, for their part, PE and VC investors see clear opportunities to drive value in insurance through technology, but are reluctant to deploy capital until InsurTechs have achieved a degree of independent success.
In PwC’s view, the inevitability of disruption by new entrants and the advent of “open insurance” means this logjam on InsurTech innovation can and will be broken. As disruption gathers pace, incumbents will need to be ready to respond, and innovation from InsurTechs will play a key role. Put simply, it’s time for insurers and InsurTechs to come together—and collaborate for mutual benefit.
*The untapped potential within the UK insurance market, PwC’s Strategy& 2019 thought leadership report on the UK InsurTech sector, based on interviews with InsurTechs, insurers and investors.