The insurance industry is evolving, and much of that change is being enabled and driven by InsurTechs. According to McKinsey & Company investments in InsurTechs worldwide grew from $1 billion in 2004, to $7.2 billion in 2019, to $14.6 billion in 2021.
However, not all tech investments have proven fruitful. Despite the promises of technology driving exponential productivity improvements and the significant focus insurers have placed on cost saving investments over the past 5-10 years, many insurers have struggled to realize significant results in this area. From 2014-2019, only 46% of insurers in the Americas were successful in their goal of reducing expense ratios.
According to PWC’s Next In Insurance 2022 report, despite clear buy-in from industry executives on the vital nature of technological evolution, many organizations are struggling to prioritize and find low risk, high returns projects amidst an abundance of potential technology investments. “We’ve seen many carriers fail to stick to a coherent strategy beyond ‘digitization.’ There’s often a lack of clarity and correspondingly nebulous goals about how these substantial investments relate to the business.”
As insurance companies struggle to realize results and cut through a plethora of InsurTech promises, they are increasingly turning to 3rd party sources and consultants to help narrow the list of potential projects that will deliver legitimate value.
Last month one such firm, FinTech Global, released their annual list aimed at doing just that. The InsurTech100 2022 strives to provide insurance leaders with a condensed list of innovators addressing the industry’s most pressing challenges.
Selected from over 1,400 nominees by a panel of industry experts and analysts, the InsurTech100 list is chosen based on five primary criteria:
- Industry significance of the problem being solved
- Potential cost savings, efficiency improvements, value chain impacts, and/or revenue enhancements generated for clients
- Innovation of the technology solution
- The importance that insurance executives know about this company
- Growth, in terms of capital raised, revenue and customer traction
According to FinTech Global director Richard Sachar, “Faced with seismic shifts in consumer behaviour, the so-called “race to digitalise” and challenging market conditions, insurers have their work cut out for them. The InsurTech100 lists helps senior insurance executives in the industry filter through the noise in the market by highlighting the tech companies transforming sectors such as underwriting, embedded insurance, pricing, distribution and data & analytics.”