November 3, 2022
What: Simple innovations can have an outsized effect on our experiences, with one great example of this being the one-click purchase process that Amazon patented in 1999. “One day in Steve’s office we were talking about some gadget, and he just went and bought it on Amazon. He was in awe about how cool it was to buy things with one click. So he called up Amazon and said, ‘Hey, this is Steve Jobs,’ and licensed that one-click patent for a million bucks.”
Why it matters: Apple used that one-click purchase process to build its app store, which now brings in about $72.3 billion annually. Apple showed that making it easy for the customer results in winning big, which has since become a huge part of how companies grow. The good news is the patent has expired, and insurers with the right tech partners can do a lot to accelerate the quoting and binding process.
Read: Apple, Amazon, Alphabet
What: Investments for insurtech startups have slowed in 2022 after a record-breaking year in 2021. Some private insurtechs may struggle to raise, but the downturn isn’t as bad as some believe it to be.
“We are simply seeing a reality check happen,” said David Wechsler, a principal at OMERS Ventures. “As insurtech valuations have become more realistic, many companies are probing, looking for M&A opportunities. I believe the next 12 to 18 months will have lots of interesting deals really invigorating the ecosystem and creating a lot more excitement for investors to come back in and at the correct prices.”
Why it matters: This is all in response to a possible recession. The good news is that there will be a flight to quality. The insurance market has historically been less susceptible to market fluctuations, so companies that can provide immediate value will see their respective stocks rise.
Read: 8 investors weigh in on the state of insurtech in Q3 2022 | TechCrunch
What: With the Ukraine war, inflation, and other geopolitical tensions, uncertainty around risk assessment is running high. This uncertainty is going to impact the renewal season, resulting in reinsurers like Swiss Re looking for ways to share the risk with customers.
Why it matters: The bottom line is that there will be rate increases for insurers across the board. Carriers will have to pass these increases down to their policyholders, and that means more policyholders looking for other options. We expect to see carriers with unique value-adds or flexible pricing structures to do better in this hardening market.
Read: Swiss Re is trying to ensure that inflation risk is shared between its customers and itself: Frank Reichelt – Reinsurance News
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