Traditional insurers, a privileged playground for insurance start-ups
The digital transformation of the insurance sector is in full swing. The young insurance companies are rushing into the breach, in particular by providing insurance companies with their expertise in technology, UX and customer knowledge.
The wave " insurtech " accelerated ! We expected it; this vertical is reaching a phase of maturity. Witness the operations of lifted funds recent months (Alan, Luko, + Simple, Tinubu Square, Descartes Underwritting, loves, Leocare, etc.) or that of repurchase and the entry of new players on the market such as Ornikar … Alain Clot, President of France FinTech and Eric Mignot, Director of France FinTech and Founding Chairman of + Simple, deliver their analysis to Fabrice Deblock for the Digital Factory.
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« A large half of Assurtech aims to provide services and product bricks to insurers while a little more than 35% are directly in contact with the end customer: brokers, full-service insurers in particular, the number of which will undoubtedly go to increasing.
To understand this trend, It is interesting to compare the relationships that fintechs created in their infancy with banks with those that insurance companies are forging now with insurers. With a few years of lag, the insurance sector is experiencing what the banking sector has already known: the first activities to be created are essentially B2B. In venture capital, we often say 'Dreaming of B2C but primarily financing B2B' because before conquering large market shares in B2C, in a market very controlled by traditional establishments, you have to invest very large sums. . B2B is often more accessible and profitable in the short term for new entrants“, notes Alain Clot, President of France FinTech
The B2B playing field is all the larger for insurtechs as insurers are still little advanced in their digital transformation. " The insurance industry has traditionally invested little in tech. The share of turnover of insurance companies invested in IT budgets is 3%, while bankers devote between 5 and 9% of their turnover to it. There is a real risk of digital dropout among traditional players. And the bulk of their IT investments relate to regulatory matters. It is therefore one of the major obstacles to innovation in this sector.", Complete Eric Mignot, Director of France FinTech and Founding Chairman of + Simple.
Another explanation for this ignition delay » digital insurance: the very structure of the market. " Unlike banking, the insurance industry is extremely intermediated, very fragmented. Where a banker can bring technology to bear on the entire value chain, which he controls from end to end, an insurer has a harder time due to the fragmented nature of its environment“, adds Eric Mignot.
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