Collaboration between InsurTechs as key to industry development

Rostock, 02.11.2023 - Recent economic and global developments have posed diverse challenges to the insurance industry. The ongoing digitalization, changing customer preferences, and increasing regulatory complexity, however, open new opportunities for InsurTechs. One way: working together on innovative solutions.

Innovation as a Driving Force

The insurance industry is undergoing significant disruptions, driven by technological advancements and evolving customer requirements. Collaboration among different InsurTechs provides access to innovative ideas, technologies, and solutions that might not be available individually. Through cooperation, continuous innovation and industry development are promoted.

InsurTechs can leverage synergies by collectively addressing challenges and sharing resources, especially for smaller companies. Shared use of technology platforms and data sources increases efficiency and reduces development costs. Simultaneously, extensive data sets from different providers can be combined to gain more informed and data-compliant insights into risks and customer behaviour, leading to more accurate premiums and better insurance packages. Best practices and experiences can be exchanged to meet regulatory requirements and ensure compliance.

An example of how such synergies can be efficiently utilized is the collaboration between hepster and ELEMENT Insurance. The MGA model practiced by hepster illustrates the benefits of such partnerships. hepster acts as a product and process owner, handling all product functions, while ELEMENT Insurance acts as the risk carrier. This clear division of supply chain elements enables an even distribution of resources and shows how such cooperation can be successful.

Customer-Centric Approach

Customers increasingly expect personalized and user-friendly insurance solutions. Through partnerships, customer needs can be better understood and fulfilled by developing tailored offerings, such as self-service features for contract management and efficient claims processing. The future of InsurTech collaborations will be shaped by technological innovations, regulatory developments, and customer preferences. Companies that are flexible and open to collaboration will be better positioned to benefit from the opportunities in this rapidly evolving industry:

• Shared data usage and analysis for better insights into risks and customer behaviour – all in compliance with data protection.
• Transparency and efficiency in the insurance process, as well as automated claims handling.
• More precise risk assessments, personalized rates, and customer understanding.
• Partnerships with Fintechs and combined products with financial services.
• Faster expansion into international markets through local partnerships for market adaptation.
• Creation of platforms for diverse financial services to enhance customer experience and loyalty.
• Expansion of the product line to include electronic insurance, including leasing, circular economy, renting, sharing, and financial services.
• Accelerated response and adaptation to end customer and partner needs.

Laura Kauther, Commercial Director of ELEMENT Insurance:

"Collaboration among InsurTechs offers immense opportunities to strengthen us in the fast-paced insurance industry. Instead of exhausting ourselves in competition, we can drive the industry forward through collaborative approaches and create innovations that advance the market and ultimately benefit our customers."

Hanna Bachmann, CRO and Co-Founder of hepster:

"Helping each other increases growth prospects. Market trends can be recognized and served quickly, providing a clear competitive advantage. It is quite possible that InsurTechs will operationally take over and realign smaller insurers in the near future to collectively meet the changing market demands. These developments highlight that the future of the InsurTech industry will be significantly influenced by cooperative approaches."