The research listed the top three threats and opportunities for insurers from insurtech:
(1) Pressure on margins (73%) and loss of market share (69%) are highlighted as the top threats fintech poses to the industry
(2) Cost reduction (81%) and
(3) differentiation (65%) are highlighted by insurers as the most significant potential gains from fintechIncumbent insurers see IT security as the biggest barrier to working alongside start-up companies. The start-ups themselves highlight “difference in management and culture” as the biggest challenge in the relationship.
Almost half (48%) of insurers fear that up to one-fifth of their business could be lost to standalone fintech companies within the next five years. According a new research by PwC, this fear has been driven by annual investments in insurtech start-ups that have increased fivefold over the past three years. Key points: Insurtech start-ups have increased fivefold in past three years Two-thirds of insurers have taken ‘concrete’ steps to address challenges Customers demand personalised products In response, over two-thirds (68%) of insurance companies say they have taken concrete steps to address fintech challenges and opportunities.