Working with InsurTechs Offers Opportunities for Insurer IT Teams, but Requires New Approach

InsurTech immaturity, cultural differences, and potential lack of insurance industry knowledge are key issues highlighted in Novarica’s new CIO Checklist brief

Boston, MA (Mar. 4, 2020) – Partnering with InsurTech startups offers insurer IT leaders access to new technology and approaches, but requires new practices in establishing and managing relationships. In a new brief, Establishing Solution Provider Relationships: InsurTech Startups – the most recent CIO checklist in a series on relationship best practices – research and advisory firm Novarica provides insurer CIOs and their teams a set of guidelines and principles on how to set practical terms with visionaries promising significant change.

“InsurTechs often have experience with new technology or analytics tools, but they can have gaps in insurance industry knowledge,” says Chuck Ruzicka, Vice President of Research and Consulting and co-author of Novarica’s new report. “These gaps can lead to miscommunications, including underestimation, cost overruns, and even compliance issues. Unrealistic expectations can be avoided if meanings and intentions are fully explored and procedures, as well as functionality, are vetted during the proof of concept or pilot project.”

Click here for the table of contents or to access the report.

Report Summary

Partnering with InsurTech startups offers insurers access to new technology and approaches, but requires new practices in establishing and managing relationships. Due to their immaturity, cultural differences, and potential lack of insurance industry knowledge, InsurTech startups come with inherent financial and business risks. Insurers should provision for a possible lack of insurance industry experience and the eventual termination of the relationship if necessary.

This CIO Checklist identifies the pitfalls and potential issues in InsurTech investments and contracts. It is the fourth in a series of briefs on establishing effective solution and service provider relationships.

The Checklist

  • Define the use case
  • Evaluate the InsurTech business model
  • Determine the overall market potential
  • Expect gaps in industry knowledge
  • Anticipate cultural differences
  • Expect IT process differences
  • Define scope and key requirements carefully
  • Architect for change or InsureTech failure
  • Predetermine acceptable investment levels

Click here for the table of contents or to access the report.

About Novarica

Novarica helps more than 100 insurers make better decisions about technology projects and strategy through retained advisory services, published research, and strategy consulting. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and more than 300 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project checkpoints, and IT strategy. For more information, visit www.novarica.com.

Source: Novarica

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