The excerpt below is from The Australian, Tuesday, 14 May 2019.
Start-up insurers stake a claim
By Supratim Adhikari
The insurance sector is shaping up as the next battleground in the local fintech scene, according to the newly minted CEO of industry group Insurtech Australia Rita Yates.
Ms Yates, who has joined Insurtech Australia from fintech hub Stone & Chalk, told The Australian she was looking to leverage her expertise in connecting start-ups and corporates, at a time when insurtech start-ups were finally ready to step out of the shadow of the broader fintech sector.
“Insurtech didn’t really exist on its own a few years ago but as the different segments within the broader fintech space have started to become more apparent, insurtech as a vertical has seen incredible growth,” Ms Yates said.
“It’s only been three years or so since the word insurtech has come into existence but as a technology trend it certainly warrants its own category, given the enormous growth globally.”
The numbers are pretty healthy locally as well, with Australia’s insurtech sector also on a growth curve. According to the latest report, produced by Ernst & Young Australia in collaboration with Insurtech Australia, the number of insurtech companies active in the market increased by more than half in the past 12 months.
The online survey, run in February and March, of insurtechs, insurers, brokers and other providers operating in Australia, also shows that 71 per cent of local insurtech businesses are now either post-revenue or post-profit, compared with just 50 per cent in 2018.
Ms Yates said the rapid growth of insurtech was a result of a clear recognition that the traditional insurance sector was ripe for digital disruption.
“The two key drivers have been customers asking for a very different experience from the industry and the opportunities that new technology is bringing to insurers,” she said.
Sydney-based Cover Genius is a stalwart of the local insurtech scene and the company’s co-founder and CEO Angus McDonald said consumers were crying out for simple, convenient solutions.
“While the incumbents wrestle with the recommendations handed out in the banking royal commission report, insurtechs are meeting the needs of customers by using the data available today to offer them unique products,” Mr McDonald said.
“For example, where 20 days is the industry average for payment processing, at Cover Genius we process claim payments instantly across 90 currencies.”
The benefits on display are forcing traditional players to take notice, with collaboration with start-ups clearly on the agenda.
“Australia’s insurtechs are playing an increasingly important role in the future of incumbent insurers, especially in the health and life insurance markets,” EY Australia partner Andrew Parton said.
“In the last year, we’ve seen collaboration between incumbents and insurtechs — one of the major impediments last year — increase significantly, with a 75 per cent increase in active partnerships.”
It’s also creating more employment opportunities inside the sector as outfits such as Cover Genius start to get bigger. The company, which sells insurance at the point of sale for online businesses, has beefed up its executive team, with a new chief technology officer and new head of insurance joining the team. It has also appointed a head of strategic partnerships and retail partnerships, another indication of the collaborative sentiment in the sector.
Ms Yates said that tapping into that sentiment would be her No 1 priority. Over the past 12 months, Insurtech Australia’s membership has doubled to 46 insurtechs, which are active in Australia and overseas.
“There are many sides to the ecosystem that we are building, it’s not just about the start-ups it’s also about helping the incumbents as well as brokers and other players,” she said.