Insurers and non-insurance companies alike are bringing on insurtech companies as strategic partners. Here are the top-line bullets you need to know.
In 2020, business relationships involving insurtech companies also hit a record high, coming in at over 650 partnerships for the year.
Below, we dig into why companies across industries are partnering with insurtechs at a rapid clip.
All the underlying data and emerging insurtech companies can be found in CB Insights’ Insurtech Expert Collection.
WHAT YOU NEED TO KNOW:
- Both insurers and non-insurance companies see insurtechs as strategic partners. Insurtech companies are playing key roles in digitizing the insurance industry, helping insurers improve their underwriting, claims, distribution, and product development efforts. On the other hand, non-insurance companies are also seeing value in partnering with insurtechs. Fintech companies like Acorns, gig economy platforms like Uber, and auto manufacturers like Ford have all partnered with insurtech companies to add insurance-related services and improve their core offerings.
- For insurers, partnerships provide a complement — or even an alternative — to investments. Some of the most active insurer investors — such as Axa, Munich Re, and American Family — are also among the insurers with the most formal business relationships with insurtech companies. However, Hiscox, one of the most active insurer partners in 2020 with 12 announced partnerships, has not been as active on the investing side. This highlights how partnerships can be an alternative way for insurers to participate in the insurtech market.
- Consumer-facing insurtech companies are partnering with other tech providers to round out their product offerings. In many cases, the goal of these partnerships is to add value for customers via added services. For instance, auto insurtech Root provides additional benefits to policyholders via partnerships with road assistance app Agero and gas station location app GasBuddy. Home insurtech Hippo recently partnered with ADT and handdii to improve the security and home repair services it offers policyholders. As these insurtech companies look to aggressively grow their customer bases, expect them to continue partnering with companies that offer complementary digital services.
- Software companies are building out insurtech ecosystems. Leading core insurance software vendors like Duck Creek, Guidewire, and Unqork are also among the most active in partnering with insurtechs. These companies are integrating with complementary insurtech products to create a stickier experience for customers by tying these products to their core suites. Horizontal software providers like Microsoft and Salesforce and more mature insurtech platforms like Bold Penguin and Snapsheet have also actively formed partnerships to build out their own insurance ecosystem capabilities.
- Insurers will continue to rely on insurtech partners to digitize every aspect of their business. As insurers innovate their business and protect the franchise, they will continue to rely on insurtech startups as key partners, such as by licensing software to improve internal operations or by leveraging new digital distribution channels. And as insurtech companies mature and build increasingly innovative solutions, expect to see insurers double down on successful partnerships and explore new ones.