New SMA Blog by Mark Breading, Partner, Strategy Meets Action
Boston, MA (Oct. 18, 2018) – New entrants seem to be coming out of the woodwork in insurance. And it is not necessarily a bad thing. The InsurTech movement, the advance of emerging technologies, and the appetite of the global tech titans are all contributing to new entrants, new partnerships, and new business models. Ultimately, it is the sense of opportunity to build successful businesses and make lots of money that are driving these new activities. A few recent examples illustrate the new interest in insurance from those both inside and outside of the insurance industry.
- WeWork partners with Lemonade. In what seems like a very natural partnership, WeWork plans to offer their WeLive members renters’ insurance thru Lemonade. WeLive members rent fully furnished apartments from WeWork for short-term situations.
- Credit Karma enters insurance. This FinTech intends to build on customer relationships to expand into auto insurance. While the initial focus will be education – helping Credit Karma customers understand how credit and adverse driving activity impacts insurance rates – the longer-term goal is to provide yet another shopping/comparison site. Fundamentally, however, Credit Karma is all about brand recognition and meeting customer needs.
- BMW and Swiss Re partner for ADAS scores. BMW Group and Swiss Re will collect telematics data from vehicles related to the use of ADAS (Automated Driver Assistance Systems) and build scores that can be used by primary insurance companies.
- Lending Tree buys QuoteWizard for $370M. FinTech Lending Tree, which has been on a buying spree, moves into insurance with the acquisition of insurance comparison shopping site QuoteWizard.
- Travelers partners with Amazon for the smart home. Travelers will set up a digital storefront on Amazon featuring smart home devices for a discount (especially security-related devices) as well as discounts on homeowners’ insurance.
- JetBlue invests in InsurTech Slice. This appears to be a pure investment play, but it is still interesting that an airline would be following InsurTech and seeking investment opportunities.
Something is going on here. It is not as if there have never been new entrants or that companies from other industries have ignored insurance. But the flurry of new activity and innovative partnerships, investments, and market approaches may represent a bigger trend. Insurance is transforming, and despite some of the doom and gloom warnings, a case can be made that there is more opportunity than ever for the industry. Even in the examples provided above, the emphasis is more on new opportunities than displacing incumbent insurance players. Indeed, in the Swiss Re and Travelers cases, the incumbents are part of the new partnerships – and these are just two of many examples.
One of the main themes of the examples highlighted above is the attention on distribution and customer relationships. While InsurTechs are working with insurers on many opportunities to improve underwriting, claims, and other areas, so far, the new entrants from outside the industry don’t appear to have the appetite to underwrite risk and handle claims. This may change, but it is likely that there will be even more interest from outside insurance in capitalizing on customer relationships. Above all, these new entrants and innovative partnerships serve to accelerate the transformation of insurance that is underway.
About the Author
Mark Breading, a Partner at Strategy Meets Action, is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward thinking strategies for success in the digital age. His inventive methods and his ability to incorporate InsurTech and emerging tech into business strategies are unparalleled. Mark also leads SMA’s research program, has overseen the publication of over one hundred research reports, and directed custom research projects for insurer and tech clients. His thought leadership in the areas of InsurTech, emerging technologies, customer experience, and digital strategies has earned him rankings as a “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the 10 finalists for the “Top Global IoT in Insurance Influencer Award.”
Before joining SMA in 2009, Mark spent 25 years with IBM, where he co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.
He is a frequent speaker at industry events; an InsurTech mentor with the Global Insurance Accelerator; and a frequent contributor of articles to Insurance Thought Leadership, Insurance Networking News, LOMA Resource, and many other industry publications.
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 www.strategymeetsaction.com.
SOURCE: Strategy Meets Action (SMA)Tags: Mark Breading, Strategy Meets Action (SMA), Transformation