Is the InsurTech Wave Hitting a Riptide?

New SMA Blog by Deb Smallwood, Founder & CEO, Strategy Meets Action

Boston, MA (Jan. 22, 2019) – Is the InsurTech wave hitting a riptide? At Strategy Meets Action, we think it has.

The riptide analogy generates a powerful image of a turbulent sea, where the strong finally reach the shore, but the weak that succumb to the powerful currents are pulled back out to the sea. The InsurTech world is experiencing a similar struggle. We are seeing distinct winners in the InsurTech market who are reaching the shore, but the rest – the vast majority – are not making it. Those few who have landed with firm footing, the winners, have captured the attention, and the investment dollars are going to them.

Headlines show that the hype around InsurTechs is settling down. We see fewer startups in the US, and it is not for the lack of a strong economy. In fact, Strategy Meets Action estimates investment in new technology to be at high levels. So, what’s happening? Investment spending has become more focused. The interest is there, but insurers have collectively started to sort through the flood of information for the best possibilities and select the most promising solutions. From the start of the InsurTech phenomena, we have predicted that many startups will fail, and the industry is now experiencing that.

Despite the smaller numbers of startups, we expect to see continued progress on the InsurTech front in 2019. Among the frontrunners, progress is accelerating and will continue to take place. Those businesses and solutions with some level of insurance expertise and capabilities are gaining recognition as they demonstrate the ability to advance their technologies and come to insurers with connections.

At InsureTech Connect, we saw many amazing ideas and solutions, but not all have insurance implications. In these cases, insurance may be the wrong industry to champion them. For many of the technology startups trying to break into insurance, it will be easier to fine-tune their applications and solutions for car manufacturers, utility companies, appliance manufacturers, or for sale direct to consumers. And the sad fact is that some ideas will never fly because they just don’t solve the right problems or have the broad applicability to attract funding.

The other reality for InsurTechs is, that as time has gone on, innovation has become a more common trend. It literally is everywhere, and novelty is harder to achieve. So, the thought of becoming the next “Uber” or “Netflix” of insurance seems less and less probable.

Last year, Strategy Meets Action said the InsurTech wave would continue … and we still believe that. However, it is a smaller number that will come ashore. The barriers to entry are causing the InsurTechs that reach insurance to be more focused and purposeful – and this is the reality of an innovative world. Many new startups are losing the “wow” factor before they ever have a chance to get off the ground.

The great thing about innovation, though, is that we will see another wave of a different size and color in the future. As new computing trends, 5G, AI (among others), and even quantum computing gain traction and become more feasible and pervasive, a new wave will pick up speed. The key will be to stay ahead of it through monitoring the progress of these technologies, studying these InsurTechs, and exploring the opportunities that they will provide.

About The Author

Deb Smallwood, the CEO & President of Strategy Meets Action, is widely recognized as an industry thought leader who is known for her expertise in helping companies rethink the traditional business of insurance and position for success in the changing insurance world. Deb’s passion is to advise insurers on innovative ways to leverage InsurTech and the emerging technologies that are required in today’s digital connected world. Deb provides insights that guide insurers on their journeys to becoming the Next-Gen Insurers of tomorrow. For over 30 years, Deb has helped customers understand how to leverage technologies, shift strategies, and make the right strategic investments. Deb has worked with hundreds of insurers and solution providers over the years, enabling them to create high business value and differentiate their businesses through their decisions and investments. Read more.

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)

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