Insurance 2022 - the year ahead
Businesses and insurers will need to be more vigilant for triple extortion threats
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Insurance 2022 - the year ahead
Insurance start-ups characterised by a more mature business plan and a deeper knowledge of the industry will shake up the market in the coming year.
In France there have been three new insurance companies created in the last couple of years, after decades without any new entrants in the non-life sector. This signals a paradigm shift that will accelerate through 2022 and beyond.
Up until now, many insurtech disruptors were start-ups steered by ambitious young people with impeccable technology credentials but limited knowledge and understanding of the insurance industry. They typically arrived with a solution looking for a problem to fix and often stumbled when confronted with regulatory and compliance obstacles as well as with the complexity of insurance distribution. This situation is now being reversed. We are seeing the arrival of a new generation of market-savvy insurtechs staffed with experienced professionals who are offering a compelling combination of technology and risk coverage.
This trend will be further fuelled by a number of factors. These include, first, the need for insurers and insurance to be appealing to young buyers, which is forcing a process of diversification in terms of product and distribution. Second, the on-going – at least for the immediate future – availability of cheap capital. And third, the knock-on effect of the pandemic which has given many businesses the need or the opportunity to take stock and consider alternative offerings, while accelerating the appetite for purchasing goods and services online.
We expect this to result in a further surge of new entrants in the non-life sector. These will typically focus on specific niche market segments that have proved difficult to access or generate a profit for traditional insurers. They will have strong partnerships with existing networks, including legacy insurers and reinsurers. In many cases, they will pursue an affinity model, supplying insurance bought in conjunction with a product or service, such as event cancellation cover, but will also attempt to offer a sufficiently diverse range of products thus allowing their customers to satisfy all of their insurance needs in one place. Distribution will be swift, easy to access and app-based. The impact of the arrival of these start-ups will be wide-ranging and enduring.
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