NTT DATA and everis Publish InsurTech Outlook 2019
September 17, 2019
NTT DATA Corporation
September 17, 2019. – NTT DATA and global consulting firm everis, part of the NTT DATA Group, have jointly published InsurTech Outlook 2019, the latest edition of their report analysing the technology landscape and start-up ecosystem within the insurance market and its evolution over recent years. The report also covers the role of industry players such as insurers, investors and technology companies, highlighting the trends that are redefining the insurance market.
The 2019 edition offers an overview of the Insurtech ecosystem, based on in-depth analysis of information available at Sybil (an NTT DATA asset, one of the world’s largest repositories of start-up information) and complemented by a variety of public and private sources of information.
In order to enhance the depth of the report, several surveys were conducted with executives from 43 insurance companies in more than 10 countries across Europe, Asia Pacific and Latin America. These interviews yielded the first-hand thoughts of global and local leaders in every insurance business line, highlighting investment trends and the emergence of new insurance products; they also reveal the steps being taken by insurers to address the challenges posed by the Insurtech ecosystem.
Several NTT DATA and everis experts collaborated to augment the results of the study by providing their local perspectives.
Business sector transformation in a world of hyper-accelerated disruption
Among its main conclusions, the report highlights the relevance of exponential technologies that are redefining the insurance sector value chain.
In this context, start-ups are playing a fundamental role in the development of solutions that address the sector’s needs. Greater client loyalty, new income sources and more operational efficiency are just some of the benefits that make Insurtech start-ups attractive partners for insurers.
From 2016 to 2018, the Insurtech ecosystem attracted investments totalling $11.2 billion; more than double the $5.5 billion raised between 2010 and 2015. Despite the majority of investment in Insurtech companies being made in more mature firms, a high number of the executives surveyed expressed a preference for investing at an early stage (with the exception of Latin America, where interviewees preferred investing at a more advanced phase).
Cloud, Big Data and AI, the most relevant technologies in the coming years
In terms of technologies, the majority of investment is targeted at start-ups active in the Cloud and mobile application field. Compared to other sectors, these solutions tend to facilitate value creation and attract investors interested in new business models. Other investments focused on Big Data, Artificial Intelligence, the Internet of Things and Blockchain technologies.
The report also indicates that investment in AI-based start-ups is growing rapidly; during 2016-2018, investment levels in the artificial intelligence sector were 665% higher than during the whole of the previous five years. This investment focus highlights the need to process and learn from data in order to construct personalised offers, attract and retain clients and achieve more efficient processes across all business lines.
Mobile applications are becoming increasingly relevant, and their impact is expected to increase owing to their focus on personalisation and the increased use of price-comparison platforms. On the other hand, e-commerce—the most commonly used technology platform—is more focused in cybersecurity due to the increase in risk it is perceived to entail.
Competition or collaboration?
Insurance companies are collaborating with Insurtechs to face these technological challenges and take advantage of new opportunities. However, the vision is not always perceived as positive: 9 out of 10 insurers consider Insurtech activity as posing a risk to their current business. Start-ups, on the other hand, value the chance to get close to traditional insurers, since access to their client databases and addressing regulatory issues are key factors in scaling their businesses.
The big four technology companies – Amazon, Apple, Facebook, and Google – are looking to innovate in the insurance sector by collaborating with different disruptive start-ups to enter the health or small and mid-caps insurance market. Their objective is to innovate during the concept, design and commercial phases of insurance products that are being adapted to new living norms (connected homes, self-driving cars, etc.) and to connect them through their platforms, transforming the insurance distribution model. According to the survey, these four companies will have a major impact on the insurance market over the coming years. Google and Amazon will have the biggest impact in Technology and Distribution, respectively.
Future challenges: towards an open innovation model
New technologies are redefining the business environment and creating new challenges for CEOs that look to succeed in a world of hyper-accelerated disruption. The answer is not just based on M&A or new technology implementation. The biggest challenge is global business transformation, where exponential leaders look for disruption to generate growth and increase competitiveness.
Bruno Abril, global partner and head of Insurance at everis, commented, “Big insurance companies confirm that Insurtech value chain fragmentation is a key point in their strategic agenda. This will enhance the necessary evolution towards an open innovation model in order to maintain their relevance in the market”.
To download the report: https://insurtech.everis.com/?lang=en
About everis, an NTT DATA Company
Part of the NTT DATA group, everis offers business solutions and strategy consulting, the development and maintenance of technological applications, and outsourcing services. Operating across the banking, insurance, industrial, utilities, telecommunications, public administration and health sectors, the company achieved a turnover of 1.43 bn euros in the last fiscal year. Currently it has more than 25,000 professionals located in offices and high performance centers across 18 countries. More information can be found at www.everis.com
About NTT DATA Corporation
NTT DATA is a leading IT services provider and global innovation partner headquartered in Tokyo, with business operations in over 50 countries. Our emphasis is on long-term commitment, combining global reach with local intimacy to provide premier professional services varying from consulting and systems development to outsourcing. For more information, visit www.nttdata.com.