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Reflections on InsurTech and the Pandemic

New SMA Blog by Mark Breading, Partner, Strategy Meets Action

Much has already been written about the implications of the pandemic, the related economic activity, and how they will affect the InsurTech movement. As usual, there are a wide range of opinions. Will InsurTech be one of the casualties of COVID-19? Or will the dramatic change to work and life patterns unleash innovative new startups and new rounds of funding? The answer probably lies somewhere in between. SMA’s perspectives are documented in a recently released research report, The Top 10 Themes for InsurTech 2020: Operating in the Pandemic Era. The first part of this blog will provide some quick observations about the developments of the last few months, but the remainder of the blog is more about the future of the InsurTech movement.

Since the pandemic began to take hold and dramatically affect the business environment, there have been some significant shifts in InsurTech. Generally speaking, insurers have been less eager to start new exploration and new projects with InsurTechs. The exceptions are the InsurTechs with solutions that address some of the digital gaps that have been exposed by the work-from-home, restricted-travel environment. They have done quite well and include companies that enable self-service in the claims space, digital payments, and other areas that reduce the processing of paper documents and the need to meet with customers in person. Projects already underway that have demonstrated ROI are continuing as insurers strive to maintain momentum and reap the value.

On the investor side, more funding has shifted to later-stage deals during this period of transition. And interestingly, there seem to be just as many new launches as ever – there is no shortage of innovative ideas. Full-stack InsurTechs, especially, seem to be gaining momentum in terms of capital and expansion into new product and new geographic areas.

The bigger question is where InsurTech goes in 2021 and beyond. My sense is that InsurTech will pick up steam in 2021 and be a formidable force for industry transformation throughout the decade. Some of the full-stack insurers and the digital distribution firms are already starting to deal with premium volumes that are causing insurers to take notice. As they expand next year, the financial impact will continue to grow toward billions in premium, up from the tens or hundreds of millions today. By the end of the 2020s, we could see some of the startups from the 2010s decade listed among the Top 25 insurers in North America.

What about all the InsurTechs with tech solutions to address business problems in specific lines and/or business areas? We expect solutions for underwriting and claims – for both automation and insight – to play significant roles in transforming those areas throughout the decade. There are many opportunities in various lines of business to advance digital transformation, thus improving customer experience, operational efficiencies, and financial results. Another area that is already starting to bloom is InsurTech solutions for the property insurance line. Increasingly rich data sources and new AI/analytics capabilities offer tremendous opportunities to understand exposures at a deeper level and underwrite/price risk. Many opportunities for proactive claims management exist, including those that leverage connected devices.

From a technology standpoint, there is still a lot of runway ahead for AI-based solutions. Technologies like machine learning, natural language processing, computer vision, RPA, and voice recognition/generation are likely to be core elements of many InsurTechs into the next decade. AI technologies are transforming many industry sectors and will result in changes to customers, risks, and operations for insurers.

Overall, SMA predicts an active, healthy, growing InsurTech movement for the decade of the 2020s (barring something like a long-term global depression). There are just too many good ideas and too much money and expertise to be harnessed for capitalizing on the many opportunities for transformation across the P&C industry.

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.

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)