Chief information officers for insurers should consider the innovation and disruption potential of insurance technology (insurtech) startups to complement their own digital strategies, said research and advisory firm Gartner.
According to Gartner, 64% of the world’s top 25 insurers have already made investments, both direct and indirect via their venture capital arms, in various insurtech startups.
Gartner also predicted that 80% of life and P&C insurers will acquire or partner with insurtech firms to help improve their competitive positions by the end of 2018.
Juergen Weiss, managing vice-president at Gartner, said insurtech companies can stimulate or accelerate innovation among insurers and complement digital business strategies.
“Gartner has seen a growing interest among insurance business and IT leaders in collaborating with insurtechs or making them part of their overall innovation policies, but research has found that most insurance CIOs are not familiar with these companies or their value propositions,” said Weiss, speaking at the Gartner Symposium/ITxpo in Australia.
“We advise CIOs to identify areas where insurtechs could complement their digital insurance strategies, and evaluate potential collaboration or investments,” he added.
Around six in 10 insurtech companies have been founded within the past three years, with two-thirds of them headquartered in the US. The Europe, Middle East, and Africa (EMEA) region is the next most important, with 27% of startups having headquarters there, mostly in Germany and the UK.
In Asia, Singapore and China (mainly Hong Kong and Shanghai) are considered traditional insurtech hubs. These markets have been actively promoting the development of a local insurtech ecosystem.
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