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The global reinsurance giant's partnering spate continues with its recently announced collaboration with German firm Simplesurance, according to Forbes.
Simplesurance operates across Europe and North America, and offers point-of-sale insurance policies via online retailers' websites. Its solution integrates into these retailers' checkout processes, enabling consumers to purchase a policy for the items they buy without leaving the page.
The partnership has benefits for both parties. While neither party revealed specifics of the deal, Simplesurance will get access to Munich Re's global network plan, which it plans to leverage for further expansion in Europe and eventually globally, according to Simplesurance CEO Robin von Hein.
The two parties will also work together to develop new products, likely bringing them to market much faster than if Munich Re developed them alone, according to von Hein. Munich Re and Simplsurance did not detail the sort of products they would be developing, but based on Simplesurance's existing services, it is likely that the new partnership will focus on consumer-facing products, rather than back-end solutions for Munich Re's business.
Munich Re has been very active in expanding its collection of insurtech partnerships. In fact, the company recently formed a special business unit to focus on partnerships, called Munich Re Digital Partners. And that unit has been very busy: In July, Munich Re announced a partnership with Slice Labs to roll out on-demand insurance products, and in September, it partnered Trov, an on-demand insurance platform.
Munich Re is likely pursuing these collaborations in order to gain access to innovative new technologies and consumer-facing products that will help it remain competitive in an increasingly digital landscape. Meanwhile, the insurtechs it partners with get easier market entry to an industry known for its complex regulation and heavy capital requirements, as well as greater access to resources for scaling and expanding across borders.
The global insurance industry is worth nearly $5 trillion, and insurance companies are at risk of losing a share of this valuable market to new entrants. That's because these legacy players have been even slower to modernize than their counterparts in other financial services industries.
This has created an opportunity for a group of firms known as insurtechs. These startups are leveraging new technology and a better understanding of consumer expectations to increase efficiencies in the insurance industry. Some are helping incumbents deliver better end products, while others are directly competing with legacy players.
Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on insurtechs that looks at the drivers behind the increasing number of insurtech companies, how they are helping or disrupting legacy players in the insurance industry, and where legacy players are innovating off their own backs.
Here are some of the key takeaways from the report:
- The opportunity is currently biggest in the US and Europe. That's because these regions have large, very mature insurance industries.
- Insurtechs' products and services mostly target retail customers. This includes small businesses and consumers.
- Most insurtechs are acting as enablers. This means that they offer products and services that help insurers and reinsurers improve their processes and better serve customers.
- Of the main players in the insurance industry, brokers are most at risk of disruption. This is because insurtechs can easily replicate their services and are solving historical industry problems faster than legacy players.
- Legacy players are also innovating. In particular, insurers and reinsurers are investing in insurtechs and fintechs working with relevant technologies. At the same time, they are improving their own direct-to-consumer digital interfaces, increasing their disruptive threat to brokers.
In full, the report:
- Explains the structure and current state of the insurance market.
- Highlights areas where insurtechs can help legacy players modernize.
- Describes where insurtechs are competing with incumbents and how their models compare.
- Provides case studies of insurtechs.
- Outlines the legacy response.
- And much more.
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