Australia faces “exponential growth” in insurtech spend and funding could even surpass that of fintech firms disrupting the banking industry, an expert has said.
A recent global report from Willis Towers Watson found that funding volume in insurtech has increased 248% to US$985 million and Australian numbers should also see a spike, according to Sudhir Pai, executive vice president and chief technology officer – financial services at Capgemini.
Pai told Insurance Business that his work, alongside firms in Australia, has confirmed that “there is going to be exponential growth in insurtech spend” as spending globally could surpass that of fintech.
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“In Australia, it is catching up quite aggressively,” Pai noted. “One of the good things about insurtech compared to fintech, is that insurtechs are working a lot more closely or collaborating with, or funded by, bigger corporates.”
Pai said that as investment grows, insurance firms may look beyond their traditional boundaries and focus on offerings to clients in health, well-being, aged care and wealth. This in turn could create more opportunities for insurtech collaboration with the insurance industry in Australia as insurance businesses look to grow value in new areas.
Pai said that while partnering with insurtechs may be the best way for both the industry and its tech partners to grow, it could be better for the industry to work on collaborations outside the traditional insurance model. The industry can learn from the banking sector and its work in the fintech market as collaboration there has worked best outside of the core business.
“Collaboration may not work well if it is really touching the core business,” Pai continued.
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