A decade ago, startup InsurTech firms startled both insurance carriers and brokers with an expanding array of innovative tools leveraging emerging digital technologies. For brokers, the firms’ ingenuity and agility in providing client services more efficiently and cost-effectively were perceived as a competitive threat.Executive SummaryThe recent surge in broker-InsurTech partnerships is a far cry from a decade ago, when the upstarts were viewed as a competitive threat. Bringing them together are the singularity of purpose of many InsurTechs—their focus on improving a specific process or function in the brokerage value chain—and the fact that no broker, even with the best IT department, has the depth to deliver expertise in different technologies ranging from machine learning and predictive analytics to the IoT. Here, representatives from some of the largest global brokers talk about a few of the partnerships they’ve struck with InsurTechs in recent years.
This danger appears to have eased, given the increasing volume of partnership deals being inked by brokers and InsurTech firms. Such alignments generally combine both entities’ strengths to enhance the traditional risk assessment, alternative risk financing, insurance broking, loss prevention, carrier selection and other consultative services brokers provide. Other partnership deals are predicated on helping brokers improve the customer experience and streamline their back-office functions.
While smaller brokers and independent insurance agents may still have concerns over the competitive threat represented by InsurTech firms, brokers like Marsh, Aon, Willis Towers Watson, Gallagher and Lockton are pursuing a more collaborative approach. The reason is the InsurTech firms’ singularity of purpose and their focus on improving a specific process or function in the brokerage value chain.