In this report, part of our Ultimate Guides series, we focus on the main drivers of success to date for emerging market insurtech companies, their top strategic priorities and targeted innovations.
Insurtechs success factors
The top success factors cited by insurtechs are innovative service offerings and user-friendly platforms. These results broadly mirror those of the overall EM fintech ecosystem.
Previously, first-mover advantage and strong management were the top success factors for insurtechs, but their weights have each declined by around two-thirds.
The top 3 success factors for insurance fintechs:
Innovative service offering
Innovation is a key pillar for insurtechs’ success. It can, for example, allow firms to improve their service offerings and, hence, enhance the consumer experience. Firms that are striving to innovate include Leapstack (China) and Compareha (Egypt).
Insurtechs need to create an easy-to-use and seamless interface where operations are self-evident and product features are easy to understand. Firms citing this as a success factor include Policy Bazaar (India) and Futuready (Indonesia).
Extensive distribution network
Extensive distribution capacity can help firms gain scale at lower unit cost. Firms citing this success factor include Saphron (Philippines) and Zhongan Insurance (China).
Insurtechs strategic priorities
The top strategic priorities for EM insurtechs over the next three years are entering new customer segments and introducing new products/services. In fact, entering new customer segments is viewed as being almost twice as important for insurtechs as for the global EM fintech population. In contrast, introducing new products and services is viewed as slightly less important for insurtechs relative to their EM fintech peers.
Since our previous report, there is less emphasis on enhancing management expertise (which was previously the top strategic priority) and a greater focus on expanding into new markets.
The top 3 strategic priorities for insurtechs:
Entering new customer segments
The diversity of the customer base in many emerging markets is huge, with significant disparities across geography, age, gender and income. Financial exclusion is also an important issue. Therefore, it makes sense for insurtechs to modify existing offerings to appeal to a broader range of customer segments. Firms planning to enter new customer segments include Smartchoice (Pakistan) and Prosto.Insure (Russia).
Introducing new products/ services
Developing new products provides a means to grow wallet share with existing customers and increase a firm’s appeal with new customers, in turn helping to drive increased scale and market share. Insurtech firms planning to invest in technology include Pier (Brazil) and Curacel (Nigeria).
Increasing use-cases of existing products/services
Insurance fintechs can partner with merchants and institutions to expand the use cases for existing products. This can help to drive growth in the user base and in transaction volume. Firms planning to enhance product/service use cases include Futuready (Indonesia) and Tameeni (Saudi Arabia).
The most frequently targeted innovations by insurtechs are those that ease customer onboarding or use artificial intelligence or blockchain technology. This prioritisation aligns with the priorities of the broader EM fintech universe.
In our previous survey, chatbots and virtual assistants were given a higher priority, but artificial intelligence has taken over their mantel.
The top 3 targeted innovations for insurance fintechs:
Using technology to ease customer onboarding
A complex customer onboarding process can result in lower business volume and less customer loyalty. Due partly to regulatory requirements, customer onboarding has traditionally been a lengthy procedure, but insurtechs like Curacel (Nigeria) and Saphron (Philippines) are working to improve the process.
Artificial intelligence for predictive analysis
Predictive analytics powered by AI/machine learning embedded in business processes can drive significant improvements such as reduced operating and underwriting costs, increased margins and profitability, and better security and reliability. Firm with plans in this area includes Futuready (Indonesia) and SmartChoice (Pakistan).
Blockchain can improve the trust, security, transparency, and traceability of data shared across business networks, and can help to deliver cost savings. Firms planning to innovate in this area include Tameeni (Saudi Arabia) and Pier (Brazil).
Our Ultimate Guide to Insurance-focused Fintechs gives a more comprehensive overview of the sector and can be accessed here.