Insurance might be a sector that cultivates an image of steady, stable and long-term security but what's happening in the Insurance Technology area is anything but staid. That's according to a new survey released by one of the newest groups to form under the NZ Tech umbrella - InsurTech.
The group has just released the findings of a survey in which 48 respondents actively participated and a further eight were interviewed. Of those who took part, the majority employed less than nine staff. This is reflected in results that show 82% of InsurTechs were established less than five years ago.
Nearly half of New Zealand InsurTech companies were initially funded by their founders, with support from families and friends. "One in four companies has raised up to $2 million capital to date. This reflects the sector's early development and growth, with companies focused on technology to improve customer engagement and experience. About 40% of InsurTechs have capital to support them beyond the next 12 months."
The areas of opportunities where InsurTech's are most focussed are on improving customer engagement, innovative marketing and distribution, efficient administration, new products, pricing and underwriting agility, and smarter loss prevention and remediation.
The survey and report were produced in conjunction with Ernst &Young, and have been based on a similar exercise carried out in Australia. So how do the two countries compare?
"In the Australian InsurTech ecosystem survey, 65% of InsurTechs were identified as enablers, where the focus is contributing to existing players and addressing the industry's challenges. The New Zealand survey shows there is clearly room for improvement in industry collaboration, with 65% of incumbent insurers and brokers admitting they are not proactively engaging with InsurTechs. By comparison, 90% of InsurTechs are proactively working to form partnerships with other InsurTechs."
According to the report four key themes emerged from the survey, these are: the InsurTech landscape is emerging at pace, the majority of InsurTechs are focussed on adding value to the customer, the InsurTech sector is leveraging technology to build international businesses and there is opportunity for greater collaboration between incumbents and InsurTech companies.
Despite this, the report notes that investment remains challenging for new companies in this area. "Without a developing infrastructure it is challenging for the sector to attract venture capital, either from within New Zealand or overseas, while New Zealand has a small network of incubator hubs, there is an opportunity for an innovation 'Centre of Excellence' that works at the intersection of insurance, funding, education, technology, wealth and health."
You can read the full report here.
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