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The message to brokers is that it’s time to learn to take risks, be innovative and entrepreneurial, and think about different ways of engaging with your channels, an insurtech expert says.
“Many people, most people are engaging digitally,” FinTech NZ general manager James Brown said. “We buy online, we research online, but we still need personal advice. So, I actually think it’s a great opportunity for brokers to improve the way they communicate and use technology as part of that process, which will allow them to leverage their trust factor, their product mix and their background.”
The problem is we’re not seeing that many brokers or broker groups coming to the insurtech table, Brown said.
“Although I wouldn’t judge that too harshly,” he explained. “They’re (brokers) are just beginning to know about it. The innovators have led the way and now we’re seeing others starting to follow the bell curve.
“If I said the word insurtech about 18 months ago, most people wouldn’t know what on earth you were talking about, and only a few market and thought leaders were beginning to look at it. Internationally, insurtech is only a couple of years old, and the great thing is that New Zealand is right up there with the new emerging environment.
“I describe insurtech as a second wave of fintech. The insurance sector has generally lagged behind, the nature of its distribution and the way it has been set up hasn’t historically brought around innovation or enhanced risk taking or different types of behaviours which we are now seeing.
“Even though insurtech sounds very technology-focused what we’re most interested in is innovation and doing things differently. Behind that there is an entire industry of little people, big people, ecosystem players, software partners, large insurance companies, technology providers, all sorts of aspects where people are going, ‘look there is something here.’”
Most companies in New Zealand are beginning to think about innovation and what insurtech means for them, Brown added. “If you’re an insurance broker where your distribution model is typically through the adviser channels, and therefore you have a different environment then then they’re not that far along,” he said. “But if you look at some of the larger companies that are investing in complete new start-ups… like Cove or InsuredHQ, companies are saying we really need to do something different and innovate.
InsuredHQ was awarded as the Most Innovative Insurance Companies in New Zealand. Get to know the other winners by reading the 5-Star Insurance Innovators 2023 IB's special report.
“Or larger companies such as Partners Life and IAG, NIB and Southern Cross who are interested in digital insurance, and different ways of engaging which is as much about customer experience as it is about technology. It’s also about how the insurance industry reinvents itself in a more consumer friendly way but at the same time is leveraging technology for backend systems and claims management.”
Brown added that it was very encouraging to have government agencies such as MBIE and the FMA providing specific and important pieces needed for the insurtech mix, as well as the legal sector, which is enabling companies to do things “better and differently.”
“One of the things I’ve liked about the group we’ve got is we have active participation from the FMA and MBIE which means we have regulators and policymakers in with the innovators and entrepreneurs and the disruptors, so it’s great that as a sector we’re moving together,” he said.
“I think the insurance sector as a whole is having aspects of the business sliced off right, left and centre. Where companies like Trov or Lemonade, that can take a slice of traditional insurance and do it differently, do it better and are not tied down by some of the burdens of legacy infrastructure and the legacy of sales and distribution channels, because you can create something online and sell it.
“So, you’re seeing many aspects of traditional business sliced away by digital business type services where people are engaging in a different way other than what they used to do through their brokers.”
