Convergence in Action: InsurTechs Meet Tech Incumbents in Core

New SMA Blog by Karen Furtado, Partner, Strategy Meets Action

Boston, MA (May 15, 2018) – One of the most pressing questions that has arisen from the InsurTech movement is this: Will InsurTech startups have a need to utilize the incumbent tech market’s capabilities? In the past three years, startups have been actively partnering with other startups, insurers, and tech incumbents. Partnerships, of course, come in many different flavors. The latest SMA research has revealed that startup MGAs and greenfield insurers are increasingly partnering with existing core systems providers – as clients.

The first wave of InsurTech startups – most of which were focused on personal lines – tended to go it alone, developing their own core systems. Many of today’s innovative new insurers and new MGAs have focused on commercial lines and see value in the core systems that incumbent insurers and MGAs already use. Their new core systems are increasingly coming from established core systems providers.

For the InsurTechs, this means that they have access to expertise and content. Both are especially helpful for InsurTechs pursuing opportunities in commercial lines – which account for the vast majority of the startups who purchased new core systems last year. The earlier InsurTech startups targeted personal lines and life/health ventures. Today, more startups pursue the significant opportunities in commercial business.

To compete in commercial lines, these startups need to have the robust capabilities that support the various new products being brought to market. Time to value is critical, and the content (rates, rules, and forms) provided by tech incumbents’ agile core systems can increase their speed to market. In addition, the expertise of their new vendor partners can be a valuable resource to help them navigate the complexity of the commercial market.

As SMA detailed in our recent report, Core Systems Purchasing to Thrive in the Digital World: What’s Hot – And What’s Not, 12% of all new P&C core systems sold in 2017 were bought by startup MGAs and greenfield insurers. We expect them to be a stronger presence in 2018 and onward, creating substantial benefits for startup and incumbent tech providers alike and opportunities in new spaces for all forms of partnerships. As this new market wave continues, the creativity and capabilities of all will be needed to support the insurance business moving forward.

Click here to learn more about the latest trends in core systems purchasing from SMA’s recent report, Core Systems Purchasing to Thrive in the Digital World: What’s Hot – And What’s Not.

For more information on what’s happening in the InsurTech movement, see SMA’s recent report, InsurTech 2018: 10 Key Themes That Will Shape the Future.

About the Author

Karen Furtado, a Partner at Strategy Meets Action, is a well-known authority on insurance technology and how it fuels transformation within insurance companies. Her focus is helping insurers prepare for the future of the industry through the decisions they make today. Karen’s deep understanding of how to effect change guides insurers in the development and implementation of their transformation roadmaps. Her comprehensive knowledge stretches across core systems, the implications of InsurTech, and enhancing adaptability and flexibility in a changing market. Her commitment to promoting innovation, encouraging the exploration and adoption of new technologies, and developing proactive ways to plan for the future draws those seeking an edge. In a highly competitive world, Karen brings exceptional knowledge and experience to the challenges of connecting solutions to business and IT requirements.

During her career in the insurance industry, Karen has leveraged her business and technical experience to enable insurers to meet a wide variety of challenges. Many insurers have benefited from her advice that spans a broad field of expertise including enterprise application strategies and implementations, the influence of a rapidly changing business and technology landscape, and outsourcing services.

Karen’s opinions on insurance, technology, and transformation are highly regarded and often sought after by the press. She contributes to a number of insurance trade journals and is also a frequent keynote speaker at major industry conferences.

About SMA

Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at

SOURCE: Strategy Meets Action (SMA)

Tags: , ,