Investors are sharpening their focus on digital marketplaces that generate business for incumbent carriers. Building a successful marketplace in insurance is far from trivial – significant friction exists, and a critical mass is needed for the network effects to be valuable to participants. On the one hand, owning the customer relationship is crucial. On the other, the problems of unserviceable customers and poor experiences become amplified manifold in digital distribution. It has never been as important to offer more efficient, accessible, and bindable policies online.
Companies are finding new means to unlock the next generation of embedded insurance, setting up platforms on which future insurance products can be scaled. These insurtechs are providing an insurance exchange that connects insurers, distributors, and customers to buy and sell different insurance and protection products. Consequently, its a cinch for clients to offer financial products outside their area of specialization by partnering with other providers. Non-insurance companies can provide insurance coverage for their customers. All can access a large user base of potential customers, who can choose from a wide range of financial products, making it easier to buy insurance.
Major insurers are joining new digital exchanges to sell not only their own policies but also those of rivals. These powerful new platforms, including Semsee, bolttech, Bold Penguin and Uncharted, pull data from many carriers, allowing agents to see multiple quotes for policies. Chubb, Travelers and Liberty Mutual have signed on, as have agencies that sell policies.
Bolttech’s exchange, having amassed over $5bn in annual premiums from 150 carriers across 5,000+ product-market combinations, is an example. This year, it became Asia’s latest insurtech unicorn with 7.7 million customers across Asia, North America and Europe. It acquired Europe-based i-surance, a B2B2C digital insurance platform, as part of its international growth strategy. This deal followed the close of an $180 million Series-A funding round. Bolttech offers innovative device protection and other digital products across Asia.
For device protection, bolttech developed Click-to-Protect, a remote diagnostics tool. Using artificial intelligence and computer vision, it can diagnose the condition of any mobile device before confirming eligibility for coverage. Its global innovation team is now building in enhanced capabilities such as fraud detection via optical character recognition plus a new Click-to-Protect offering for smart watches. Click-to-Protect is currently available across multiple markets, including Hong Kong, Ireland, Italy, the Philippines and South Korea.
Singapore-based Uncharted is an ecosystem of carriers, MGAs, brokers and partners. Its insurance platform-as-a-service (iPaaS) powers embedded distribution and servicing solutions for a global marketplace. With any product-channel combination, it can be deployed in any market in a matter of weeks. Uncharted iPaaS offers a unique and configurable stack of core insurance services, each addressing key customer experience touchpoints and enabling a digitized end-to-end insurance process for insurance distributors and underwriters.
Partnering with best-of-breed technologies, the iPaaS comes integrated with payment gateways (Stripe), CRM (Salesforce), data analytics (Google) and omnichannel servicing (Zendesk). Using transactional and conversational data from core policy, pricing and claims, clients optimize and tread the balance between customer experience and portfolio management across its global digital portfolio.
The growth of digital distribution represents a shift in how insurers compete in markets for personal coverage as well as business and commercial lines worth hundreds of billions of dollars annually. A company that writes policies for autos but not homes can use such exchanges to offer homeowner coverage from other carriers, pre-empting customers from shopping elsewhere. The auto-policy company earns a sales commission on the homeowners policy while the other insurer gets the premium revenue. While exchanges bring more customers, they also pose a threat by allowing smaller insurers with specialized policies to reach a large market, clearly a risk for big insurers.
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