In search of a new ‘dominant design’ for the industry. What does insurtech have to offer?

There is little in the world of insurtech happening today that insurers couldn’t arguably choose to do for themselves if they were motivated to do it. They have the capital to invest. They have resources and could hire to fill gaps in any new capabilities required. They importantly understand the market and know how to move with the trends. And yet, despite having all of these things, they readily engage with the start-up community to do the things that arguably they could do for themselves.  So, why is that?   

In Making the Most of the Innovation Ecosystem, Mike Fitzgerald’s observes the main cultural differences between insurers and the start-ups they court. These cultural differences give us a strong clue as to why insurers engage with start-ups, even though on paper they do not and should not need them.

Alongside these deep cultural differences, I believe that there is another angle worth exploring to help answer the question, and that’s the market’s maturity stage and, with it, the strategies required to succeed.

One model that helps explain this relates to the work of Abernathy and Utterback on dynamic innovation and the concept of the ‘dominant design’. To be relevant to this discussion, you first need to believe that we’re on the cusp of a shift from an old world view of the industry based upon a well-understood and stable design towards one where substantial parts of the insurance proposition and value network are up for grabs. You also need to believe that, for a period at least, these two (or more) worlds will co-exist.

So, here’s a quick overview of the model (in case you’re not familiar with it)…

Settling on a “Dominant Design”

First introduced way back in the mid-1970s and based upon empirical research (famously using conformance towards the QWERTY keyboard as an example), Abernathy and Utterback observed that when a market (or specifically a technology within a market) is new, there first exists a period of fluidity where creativity and product innovation flourishes. During this period, huge variation in approaches and product designs can co-exist as different players in the market experiment with what works and what does not.

In this early fluid stage, a market is typically small, and dominated by enthusiasts and early adopters. Over time, a dominant design begins to emerge as concepts become better understood and demand for a certain style of product proves to be more successful than others. Here, within an insurance context, you'd expect to see high levels of change and a preference for self-build IT systems in order to control and lower the cost of experimentation.

Once the dominant design has been established, competition increases and market activity switches from product innovation to process innovation – as each firm scrambles to find higher quality and more efficient ways to scale in order to capture a greater market share. This is the transitionary stage. 

Finally, at the specific stage, competitive rivalry intensifies spurred on by new entrants emulating the dominant design, incremental innovation takes hold and a successful growth (or survival) strategy switches to one that either follows a niche or low-cost commodity path. Within an insurance context, outsourcing and standardisation on enterprise systems are likely to dominate discussions.

Applying the ‘dominant design’ concept to the world of insurance and insurtech

Building upon the co-existence assumption made earlier, within the world of insurtech today, there are broadly (and crudely) two types of firm: (1) those focused on a complete proposition rethink (such as Trov, Slice and Lemonade); and (2) those focused on B2B enablement (such as Everledger, Quantemplate and RightIndem). The former reside in ‘Fluid’ stage (where the new ‘dominant design’ for the industry has not yet been set and still may fail) and the latter in the ‘Transitionary’ stage (where the dominant design is known, but there are just better ways to do it).

Figure: Innovation, Insurance and the 'Dominant Design'


(Source: Celent – Adapted from Abernathy and Utterback (1975)

Outside of insurtech, within the 'Specific' stage, there is the traditional world of insurance (where nearly all of the world’s insurance premiums still sit by the way) that is dominated by incumbent insurers, incumbent distribution firms, incumbent technology vendors, and incumbent service providers.

So what? 

What I like about this model is that it starts to make better sense of what I believe we’re seeing in the world around us. It also helps us to better classify different initiatives and partnership opportunities, and encourages us to identify specific tactics for each stage – the key lesson being "not to apply a ‘one-size fits’ all strategy to the firm".

Finally, and more importantly, it moves the debate on from being one about engaging insurtech start-ups purely to catalyze cultural change (i.e. to effect the things that the incumbent firms cannot easily do for themselves) towards one begging more strategic and structural questions to be asked, such as will a new ‘dominant design’ for the industry really emerge?, what will be its time-frame to scale?, and what specific actions are required to respond (i.e. to lead or to observe and then fast-follow).

Going back to my original question “What does insurtech have to offer?”. Insurers can do nearly all of what is taking place within insurtech as it exists today by themselves…but, as stated at the start of this blog, if, and only if, they are motivated to do so.

And there’s the rub. Many incumbents have been operating very successfully for so long in the ‘specific’ stage optimizing their solutions that making the shift required to emulate a ‘fluid’ stage is a major undertaking – why take the risk?. However, this is not the only issue that is holding them back. For me, the bigger question remains one of whether there is enough evidence to show the existence of an emerging new ‘dominant design’ for the industry in the ‘fluid’ stage that will scale to a size that threatens the status quo. Consequently, in the meantime, partnering and placing strategic investments with insurtech firms capable of working in a more ‘fluid’ way may offer a smarter more efficient bet in the meantime.

In a way, what we’re seeing today happening between insurers and insurtech firms  is the equivalent of checking out the race horses in the paddock prior to a race.  Let the race begin!







The UK’s First Personal Insurance Policy for ‘driverless cars’: Too early or just in time?

Yesterday, we received a press release announcing the launch of a new insurance proposition targeted at personal use for ‘driverless cars’ from Adrian Flux in the UK. This news arrives hot-on-the-heels of the Queen’s Speech last month that announced the UK Government’s intention to go beyond its current ‘driverless’ trials in selected cities and legislate for compulsory inclusion of liability coverage for cars operating in either fully or semi-autonomous mode.

As the press release suggests, this may be the world’s first policy making personal use of driverless cars explicit in its coverage (we haven’t been able to validate this yet). Certainly, up until now, I suspect that most trials have been insured either as part of a commercial scheme or, as Volvo indicated last year, by the auto manufacturer itself or trial owner. 

What I find particularly interesting about this announcement is that they have laid the foundation for coverage in their policy wording and, in doing so, been the first to set expectations paving the way for competition.

Key aspects of the coverage (straight from their site) include:

  • Loss or damage to your car caused by hacking or attempted hacking of its operating system or other software
  • Updates and patches to your car’s operating system, firewall, and mapping and navigation systems that have not been successfully installed within 24 hours of you being notified by the manufacturer
  • Satellite failure or outages that affect your car’s navigation systems
  • Failure of the manufacturer’s software or failure of any other authorised in-car software
  • Loss or damage caused by failing when able to use manual override to avoid an accident in the event of a software or mechanical failure

Reflecting on this list, it would appear that coverage is geared more towards the coming of the connected car rather than purely being a product for autonomous driving. Given recent breaches in security of connected car features (the most recent being the Mitsubishi Outlander where the vehicle alarm could be turned off remotely), loss or damage resulting from cyber-crime is increasingly of concern to the public and the industry at large – clearly an important area of coverage.

Given the time taken to legislate, uncertainty over exactly what the new legislation will demand, and then for the general public to become comfortable with autonomous vehicles, I suspect that it may be quite a few years before a sizeable book of business grows.  Often, the insurance product innovation is the easy part – driving adoption up to a position where it becomes interesting and the economics work is much harder.

Maybe this launch is a little too early?  Or maybe it's just-in-time?  Regardless of which one it is, in my opinion, this is still a  significant step forward towards acceptance. I also suspect that some of these features will start to creep their way into our regular personal auto policies in the very near future. I wonder who will be next to move?

If you’re interested in learning more about the potential impact of autonomous vehicles on the insurance industry, why not register here for Donald Light’s webinar on the topic tomorrow.


One last look back at Google Compare

It’s old news by now that Google is shutting down Compare, its financial services and insurance comparison site. It wasn’t open long – less than a year. When Compare was first announced, the industry reacted with warnings that this was a major disrupter in insurance distribution. With the massive audience that Google has, the industry expected that Google was going to swoop down and capture the online insurance market – which by the way is pretty big – typically 75% of prospects research online and 20-25% of all new auto policies are purchased on line according to those who track this type of metric.   So what happened? Well, the fundamental idea of capturing the online market is a sound idea. And Google was pretty smart at avoiding all the hard technical costs of building out the aggregator engine by partnering with those who had already done the hard work – like, Coverhound and Bolt.   But the business model of an online aggregator is hard. There are three models – online agents – who earn full commissions. That wasn’t really Google’s deal. They weren’t interested in any of the after service or ongoing relationships. A traffic generator – sending a potential lead to another site and being paid for the eyeballs. Well, that’s not very lucrative either – and frankly, Google can make money through their own advertising and search capabilities. Spending the money to build an online quoting front end only adds cost to something they already do quite well, thank you.   So why would Google have invested the money in an online quoting front end? To take advantage of a lead model. With a lead model, the aggregator collects data, processes a request for quote and sends a highly qualified lead to be fulfilled. The price per lead is significantly higher than the price for traffic. But there’s a fundamental challenge with this model. For the lead to be valuable to a carrier, the lead has to actually purchase insurance. And because a lead is sold to multiple carriers, the acquisition costs rise for a carrier.   Let’s say a lead is sold for $5 to ten carriers. The aggregator makes $50 for that lead. But only one carrier actually writes the lead. If ten leads are sold, and each carrier writes one, the aggregator makes $500 but the carrier has spent $50 for that lead. Play out a competitive situation where the leads aren’t equally distributed, and you can see that the acquisition costs can rapidly rise. If I only get one lead out of twenty, I’ve spent $100 for that lead. If I only get one lead out of $30 I’ve now spent $150 for that lead – which now is pretty close to what I’d probably be paying an independent agent. And what if the customer NEVER buys – and simply goes in looking for prices so they have a comparison to an off line model? The numbers rise rapidly. Remember those numbers above – 75% shop on line and 25% purchase on line. That means that only one in three leads actually results in a sale. Assuming leads are distributed evenly, an aggregator will distribute 165 leads before I close one. That brings this $5 lead fee up to $82.50 –, which is pretty expensive. The way to make those economics work is to increase the conversion rate so that more of the leads a carrier purchases actually ends up buying a policy.   So while carriers are very interested in participating in the online marketplace, they really want to work with those aggregators who are successful at converting traffic to leads that will convert to policyholders. The online agent model is attractive as the carrier doesn’t pay until the policy is written. The traffic model is similar to online advertising, so that works as well. But the success of a lead model is a combination of the price of the lead and the likelihood of closing that lead – which is dependent on the number of carriers the lead is sold to and the propensity to buy.   So here’s where Google lost an opportunity with Compare. They thought they could convert relatively low paying traffic into high paying leads simply by putting a quoting front end on and didn’t think through what they could have done to improve the conversion rates. With their analytical power, Google could have created a truly disruptive experience by providing consumers with a powerful recommendation engine. Google is a master at finding out information about individuals from social media and other publicly available data. They could have created an algorithm that used the information about the lead to tailor and target recommendations.   Personal auto isn’t that hard. If we were talking about commercial, it’s a much harder set of algorithms. But honestly, it’s not that hard to create something that tells a customer that given their location, the value of their home, the type of vehicle and their driving record, 64% of people like you choose this limit/deductible/additional coverage etc. And getting a personalized recommendation drives conversion. When people trust that the advice is good, they’re willing to buy. We’ve seen many examples of how inserting advice and recommendations into the quoting process drives conversion.   When I personally go to get an online quote – it’s part of my job – I enter information that shows I own a home in California and I drive a luxury car. So why oh why do the aggregator sites today recommend minimum limits coverage to me? My car is worth more than that. Today, trusting the advice from an aggregator site is dicey. And that is why policyholders continue to rely on the advice of an agent. Does this mean the role of aggregators is dead? No.   But Google missed a major opportunity to truly disrupt by providing a powerful recommendation engine that could use their ability to easily find information about individuals and combine it with their powerful analytical abilities. They ended up creating just the same thing we had back in the 90’s. Kudos to them for killing it quickly – but they missed an opportunity to use their capabilities to make the model work.  

Silicon Valley? No, Chilecon Valley

In previous blog posts regarding fintech in Latin America my position was, and remains, that one of the reasons for being behind is that it lacks of a “Silicon Valley” equivalent. Efforts to create a fintech ecosystem, as Finnovista is doing, become a good alternative to overcome the absence of a geographical pocket of innovation. Particularly consider the market fragmentation of Latin America comprised by 19 countries, some of which have 3M inhabitants to Brazil having +200M. People in most countries may speak the same language but markets are far from being similar just for that. Under (or against?) these circumstances, Chile is working to become Latin America’s Silicon Valley. One of its most attractive initiatives is “Start-Up Chile”, created four years ago to transform the Chilean entrepreneurial ecosystem. It began with a question: “What would happen if we could bring the best and brightest entrepreneurs from all around the globe and insert them into the local ecosystem?” The initiative offers work visas, financial support, and an extensive network of global contacts to help build and accelerate growth of customer-validated and scalable companies that will leave a lasting impact on the Latin American ecosystem. The idea is to make the country a focal point for innovation and entrepreneurship within the region. Start-up Chile, with only four years, is a start-up itself but it has a good starting point and great potential:
  • Chile has demonstrated for years its entrepreneurial spirit, with Chilean companies competing successfully in various industries (air transportation, financial services, and retail, just to mention a few) and a stable economy.
  • This year two Chilean start-ups were the winners of the BBVA Open Talent in Latin America:, aiming to financial inclusion by creating a credit scoring based on utility payments; and Bitnexo which enables fast, easy and low cost transfers between Asia and Latin America, using Bitcoin.
While other countries and cities in the region are working in offering support to start-ups, it seems Chile is leading the way. Hopefully this triggers some healthy competition in the region, which in the end will benefit all. In the meantime, let’s meet at Finnosummit in Bogota – Colombia next February 16th. Join financial institutions, consultants, tech vendors, startups and other digital ecosystem innovators, to learn how startup driven disruption and new technologies are reshaping the future of financial services in the region. Remember to use Celent’s discount code C3L3NT20% for a 20% discount on your conference ticket.  

$13 million investment in social insurance signals disruption

Will a sharing economy model work in insurance? The announcement about the start up Lemonade highlights the challenges that social insurance (also called peer-to-peer insurance) faces. A Celent colleague, Jamie Macgregor attended a panel on social insurance propositions at FinTech Connect Live in London this past week (see Jamie’s blog post). On the panel were leaders of three such companies, Sebastian Herfurth, co-founder of Friendsurance, Steven Mendel, CEO and co-founder of Bought by Many, and Louis de Broglie, President and co-founder of Inspeer. These companies operate as brokers, managing the transaction between the end consumer and insurers. They offer either a deductible sharing scheme or a pooling mechanism to gain price discounts. The panellists spoke about their common challenges — sustaining growth and educating the consumer about an alternative approach to insurance. It remains to be seen if any can achieve critical mass. Of the three, Friendsurance is further along having started (way back!) in 2010. (See Celent report: Friendsurance: Challenging the Business Model of a Social Insurance Startup — A Case Study) Similar brokerage models have also been adopted by Guevara and Tongjubao. These companies seek to apply social insurance to more complicated lines of business – automobile (motor) and life, respectively. The Lemonade announcement stated that it will expand the social insurance model beyond sales and service by taking on risk on its balance sheet. They report that they have applied to be an insurer in New York. This will be an early, significant test given that state’s past regulatory reputation. However, the company has some strong arguments to make. They can point out that sharing increases transparency and aligns the interests of an insurer with their consumers. Additionally, the sizable initial capitalization will positively influence regulators. These alternative approaches are good news for the industry as they challenge the traditional, sometimes adversarial, relationship between insurer and insured. The ability of Lemonade to secure $13 million in initial funding from veteran venture capitalist firms (Sequoia Capital and Aleph) is a serious indication of industry change.

Personal musings from one of the world’s first InsurTech incubators

Last Friday (and flowing into the weekend), I was privileged to take part as a mentor in the final selection process for the first “InsurTech” cohort of the StartupBootcamp’s accelerator programme targeted at the insurance industry. This programme claims to be one of the first specialist “InsurTech” accelerators to be run globally by an independent firm. The programme has attracted pretty impressive backing from the industry with firms like Admiral, Allianz, Ergo, Intesa SanPaulo, LV=, Momentum, LBG/Scottish Widows, Tryg and UnipolSai taking partnership roles. To give you an idea around the scale of achievement of those who got through, the process started with circa 1.3k interviews, 250+ applications, 42 short-listed ideas and then whittled down to just 18 finalists…from which just 10 could be accepted onto the program. These ten firms will now go on to be mentored during their start-up phase, have their ideas challenged and further developed from people within the industry and independent entrepreneurs and, in doing so, build the network they will need to both attract funding and find new clients. Over the two days that I spent with the finalists, there were a number of themes that came through the submissions. Here are my personal musings: Data featured strongly across nearly all of the initiatives. Having access to either unique sources of data (whether from a home move, from a travel plan or from connected world) and a model for assessing underwriting risk appeared to be a winning combination. Digital engagement, aggregation and ‘robo-advice’ are hot topics. What I found most interesting was the focus on underserved markets, whether targeting prospects with poor health records, in difficult to reach populations around the world, or educating Gen-Y/Z of the value of insurance. Addressing underserved markets profitably is a big issue that the industry often struggles with. A fertile area if tackled well. What impressed me the most, however, was the passion and sense of purpose displayed by the teams in fixing something that just feels ‘plain wrong’ to them. The Internet of Things (IoT) is going to change the industry’s client engagement experience and liability profile. Five initiatives related to the IoT were submitted. Three were focused on wellbeing, one on the connected home and one on drones. Although it didn’t quite make it into the final ten, I found the drone initiative fascinating. With Amazon and others itching to launch commercial drone services at scale, this is a market that is set to grow. Drone insurance could be the next ‘fleet’ or ‘auto insurance’ (as was pointed out by my fellow mentor Charles Radclyffe). Certainly, the current risk models in use today are immature and unlikely to be adequate for a world where autonomous vehicles are delivering packages across our heads 24×7 (assuming the regulator allows it). Sadly, the drone initiative didn’t quite make it into the final ten. Personally, I wonder if it’s just maybe a little too early, but perhaps still one to watch for the future? As with anything IoT related in insurance currently, each initiative will face a shared challenge. Although the proposition concepts may be compelling, the instrumentation rate of adoption will ultimately set the pace for growth. The IoT is still in its infancy across the industry and convincing prospective clients to share their instrumented personal data is no small undertaking. Data permissions are a growing concern for both individuals and regulators. It was refreshing to see some of the propositions pitch personal digital vaults as part of their propositions, whether for managing data from connected devices, personal wellbeing or personal belongings. Although it’s not yet clear how the market will develop for these services or how they will be monetised beyond a simple subscription model, services like these may suddenly find themselves in the limelight once regulators step in to protect personal privacy. Regulatory compliance. It wouldn’t be the insurance industry unless there was at least one idea focused on regulatory compliance. What if you took all of your regulatory compliance reports produced, aggregated them, and then analysed them? A really simple idea without a huge amount of cost involved. It was a refreshing couple of days. I look forward to seeing how their ideas and propositions develop over the next year. If you’d like to know more about each of the final ten, details can be found here.

Scary thought: What happens when the worlds of startups and insurers collide?

Scary044Accelerators, incubators, hackathons and labs, oh my! There have been an increasing number of partnerships between insurers and start-up technology companies in the past year. It is an exciting time, full of possibilities and I don’t mean to pour cold water on the enthusiasm, but… What happens when fast-moving startups meet governance-heavy insurers? When faced with a joint decision, how will professionals who have spent a career avoiding risk reach agreement with their partners who seek out risk? To what degree should action plans be coordinated and how is that done if one group is using an agile development method while the other prefers waterfall? Do these differences really matter, or will the incentive to deliver something really cool power through such differences? It is time to ask this question, along with what is, and isn’t working, and what actions will improve results. Celent is excited to partner with Silicon Valley Innovation Center to assess the current state of innovation partnerships in insurance. We value your views would like to invite you to participate in a survey. Leave your email and I will send you a summary report. The goal of this survey is to accelerate insurance industry innovation / transformation by identifying effective partnering methodologies and processes. It specifically focuses on the relationship between incumbent insurers and start-up firms. It takes under 10 minutes to complete. Hope you will add your views: Click here to start

In the quest of making fintech a reality in Latin America

The fintech ecosystem has been evolving and maturing in Latin America for the last three years mainly due to the effort of some participants, including Celent, to connect all key players of the fintech ecosystem. Unlike the USA where there are geographical pockets of Innovation, as Silicon Valley, that brings the actors together based on proximity, nothing like this exists in Latin America Furthermore, the individual (country) market size is significantly smaller when compared to the USA. Fortunately technology allows business to be conceived global or at least regional and therefor provide the scale needed for a fintech start-up to be viable. For these reasons, it is essential to work an ecosystem, a network of participants, regardless of their geographic location in Latin America. I do not foresee a sustained and increasing development of fintech start-ups and initiatives in the region without the existence of this ecosystem. In this last three years we have seen many cases of “me too” fintech start-ups. While this is not bad, it doesn’t show creativity either. Happily we have also seen completely innovative ventures, especially around blockchain, but without this being the sole focus. There are all kinds of fintech start-ups; in payments, leveraging the use of data and focusing on customer experience; in loans, traditional and new models such as crowdfunding and Peer-to-Peer (P2P); in insurance distribution and risk management leveraging the Internet of Things (IoT) just to mention a few. How is this playing for the insurance industry? I believe that the insurance industry is at a tipping point in fintech although I see it more developed out of Latin America. I believe there is a great opportunity gathering and using data for underwriting, claims, and fraud detection; taking advantage of the IoT to develop new personalized products and working on claims prevention; in distribution enabling new channels and becoming more digital and technology reliant, and even using P2P models; engaging with customers in new and improved ways; and discovering how disruption in payments can be leveraged in insurance. In insurance (P&C, life and health) we are seeing that traditional players start moving towards digital environments and interactions, experimenting with technologies such as telematics and with the opportunities arising of the IoT. In Latin America this is incipient, but we see that it improves every year. According to our most recent research 41% of insurers in the region have a formal innovation program which has been running, as minimum, for 2 years and 35% indicated that it doesn’t have a formal program yet. The fact that only 8% of them are focusing on disruptive innovation allows us to think that change will be slow, mostly based on incremental innovation, unless some external factor can accelerate change. The main insurance companies globally are either funding accelerators, have created their Innovation labs, or have established funds to invest in fintechs. However, innovation is often difficult for established players and initiatives of new players appear seeking mainly to innovate in product, distribution, customer experience and looking to benefit from the IoT for both underwriting and claims. Ingenie, one of the pioneers in offering a pay-per-use model based on telematics alongside its strategy of risk prevention, is not really an insurer but a technology company that was forced to go direct as a consequence of the lack of interest from established insurers in adopting a pricing and underwriting model based on the use and individual behavior of the insured. This model is no longer a novelty and has been adopted by many insurers around the world; it is even being replicated in property, life and health insurance. Recently John Hancock announced the launch of an incentive program based on the insured to share data related to its health, but it is not the only one; Discovery was one of the pioneers to launch it many years ago in South Africa. Oscar offers it for health, along with a digital-only user experience. Friendsurance, in Germany, has adopted a model based on social networks and P2P insurance that although it is oriented to auto, it could be applied to other risks (including microinsurance). In parametric insurance (aka index based insurance) using sensors and data, we have seen initiatives as Kilimo Salama aiming to market agriculture insurance massively, in segments that otherwise was not viable to serve. This is indeed an interesting case of extreme digital, with innovation applied in all the insurance life cycle. An area that we still see relegated in Latin America is the widespread use of data, a historic deficit that in many cases can be represented by the difficulty of something as simple as not having a claims database at industry level. Blockhain, for its novelty, is another area where insurers haven’t yet stepped in. Distribution, in the region, is mostly not under the control of the insurer; the direct channel is insignificant in volume when compared to the intermediated business, therefore innovation depends to a large extent of the capabilities of the distribution channels to adopt new technologies and rethink their own models. In this sense banks distributing insurance, where bancassurance is permitted, as well as the largest brokers seem to be in a privileged position to capitalize this opportunity, but suffer the same challenges that other large established players and the final word has not been said yet. Could an external player, someone that understands digital, data and customer experience, change the market dynamics? They are certainly doing so in banking, especially around payments. Google has already entered the insurance industry, on the distribution side, in United Kingdom and the USA. The founders of Alibaba and Tencent Holdings Ltd acquired shares of Ping An Insurance Group Co of China Ltd in a deal valued at $4.7 billion of dollars in December 2014, in what I see as another major threat to the industry from the outside, but taking positions to be able to integrate the business, from distribution to assuming and managing risks.
Three Giants in Internet Finance

Three Giants in Internet Finance

I foresee that in personal lines insurance we will get used to buy from companies that offer the best digital shopping experience, being these insurers and intermediaries that were able to adapt by learning how to compete in a digital world, or new players coming from the digital retail sector. In commercial lines I don’t foresee a threat from the outside in the short or medium term regarding distribution, but a deeper use of technology by insurance companies to become more efficient in the marketing of insurance. The level of advisory and specialization required makes it difficult to envision it can be transformed into a digital experience of purchase and servicing in a short-medium time frame. Nevertheless, in both cases, insurers will continue to be the one assuming risks, just as how banks fund and service credit lines. In this sense insurers must offer flexibility and agility in creating new products, but mainly with the ability to do it based on the use of data, the IoT, and easily integrating with its ecosystem. We will be meeting on February 16th 2016 in Bogotá – Colombia at Finnosummit to discuss the opportunities and challenges for the fintech ecosystem in Latin America. Fintech start-ups can participate of the Finnosummit Challenge, a great opportunity and very interesting prizes for winners. If you want to attend Finnosummit be sure to use Celent discount code: C3L3NT20%. See you there!  

Announcing the winners of the 5th Asia Insurance Technology Awards

Celent and Asia Insurance Review hosted the 5th Asia Insurance Technology Awards (AITAs) at AIR’s CIO Technology Summit at Le Meridien Hotel Jakarta on 1 September 2015. The AITAs recognize excellence and innovation in the use of technology within the insurance industry. This year we received over 30 nominations from Australia, Hong Kong, Taiwan, India, Sri Lanka, Indonesia, and Pakistan; as well as the Asia Pacific divisions of global insurers. There were many impressive submissions, from which our international panel of Celent insurance analysts selected the very best to receive the six awards. The Innovation Award recognizes innovation in business models or in the use of technology. The winner was MetLife Asia. MetLife Asia implemented Advanced Data Analytics to transform big data into customer insights and to deliver a more personalized customer experience – delivering the right products and services, for the right people, at the right time. They are using these insights to inform product and services development, and to deliver sales leads to agents. The company won the award because of the innovative usage of data analytics. The IT Leadership Award honors an individual who has displayed clear vision and leadership in the delivery of technology to the business. The recipient will have been responsible for deriving genuine value from technology and has demonstrated this trait with a specific project or through ongoing leadership. The winner was Girish Nayak, Chief – Customer Service, Operations and Technology at ICICI Lombard General Insurance. ICICI Lombard implemented a business assurance project to address the ever present gap between real business uptime on the ground vs technology uptime. The firm implemented an in-house customer experience center; and deployed an infrastructure as a service model in Microsoft Azure Cloud. These initiatives generate genuine value for the business. The Digital Transformation Award honors an insurer who has made the most progress in implementing digitization initiatives. BOCG Life was the winner. BOCG Life implemented the Electronic Commerce System to provide online needs analysis and policy services. Through a transparent, direct and needs-oriented process, it facilitates prospective customers applying for multiple products they need in one go, and allows customer to adjust the offer according to their budget. The company won the award because of the way it is building trust and developing long-term relationships with customers through digital transformation. The Best Newcomer Award recognizes the best new player in the insurance technology field. The winner was CAMS Insurance Repository Services. CAMS Insurance Repository Services launched the Insurance Repository to provide e- Insurance Accounts to maintain policies as e-policies. This brings new efficiencies and benefits across the stakeholders, including Policy Holders, Insurers, Agents and the Regulator. The company won the award because they demonstrated real, unique value to the ecosystem. The award for Best Insurer: Technology honors the insurer who has made the most progress in embracing technology across the organization. The winner was RAC Insurance. RAC Insurance implemented a series of projects to digitize the business between suppliers, members and RAC Insurance. These projects include Claims Allocation, Motor Repairer Integration, and a B2C platform. The company won the award because of the way technology transformed the organization’s capability by offering an exceptional, one-touch experience for their members through online channels. Finally, the New Business Model Leveraging Mobile Applications Award recognizes the insurer who has developed a new, perhaps disruptive business model involving the innovative use of mobile technology. Max Life Insurance won the award. Max Life Insurance launched mServicing and mApp which enable digital servicing of customers, sales force and operations. The company won the award because of the use of mobile technologies to increase agent activity and engagement, enable speedy issuance of policies, and enhance business quality and operational efficiency. Be on the lookout for the 6th Asia Insurance Technology Awards in 2016. We’ll post another blog when the nomination period opens, sometime around June 2016. You can also find information on Celent’s website:

Celent Innovation & Insight Day Preview

Celent’s Innovation and Insight Day is about a month away, and everyone at Celent couldn’t be more excited. We have great external speakers bookending the day, and we’ll be exploring exciting technology implementations with 15 Model Insurers in five categories (plus Celent’s Model Insurer of the Year):
  • Digital and Omnichannel
  • Legacy and Ecosystem Transformation
  • Data Mastery and Analytics
  • Innovation and Emerging Technologies
  • Operational Excellence in Non-Core Systems and IT Management
Our first speakers, Betsy Hubbard and Debra Jasper, are from Mindset Digital, an online social media training firm. As financial firms grapple with their approaches to social media, Betsy and Debra’s perspective, delivered in a completely different style than what most banks are used to, will provide ample food for thought and some concrete next steps. Celent analysts will be presenting research throughout the day as winners are announced and cases are discussed.  Jamie MacGregor will also offer his perspectives on the state of innovation within the industry as well as where he sees the industry moving over the next few years. Ending the insurance day will be Rod Willmott, Innovation Director at LV=, one of UK’s largest insurers and the third largest motor insurer.  Listen as Rod discusses how LV= established a “Fast Track Innovation” process to facilitate rapid responses to business needs and to accelerate strategic business objectives that were previously considered too challenging or costly to consider. Registrations are running well ahead of last year, and our Carnegie Hall venue may well get to Standing Room Only (although you won’t be able to buy tickets at TKTS on Monday morning). We hope to see you there on March 23rd; to learn more and to register, please visit our I&I day site. model insurer logo