Trying to move players with decades of experience (in some cases with centenary companies) who have earned a place thanks to a very traditional mentality and culture makes innovation and the culture of permanent change go through stages of great tension.
During the pandemic years, these resistances were swept away by a context that put on the table the value of digitizing insurance and the industry’s ability to adapt to a customer who It only had one management channel: digital.
Thus, the final lesson was that if those cultural obstacles that the difference in paradigms suppose are overcome, that same friction generates a totally surpassing flow of products, processes and customer value.
Financial inclusion in insurance is achieved through different channels: direct sale to the final consumer or through integration with other services, companies and platforms where we know that the insured prospect is.
In a region where the population is focused on spending, Promoting the culture of prevention and insurance is a marathon where the distribution strategy is the key to achieving said inclusion, causing the least impact on the insured’s economy. The perceived need for insurance usually appears once the claim, theft, or loss has occurred; then it is too late and the vicious cycle of lack of protection tends to reproduce itself.
That is why, to bring the insurance policy closer and cover the protection gap, it is necessary for insurtechs to be able to integrate into the platforms and applications that the user already has integrated into their daily life.
El know how para design, integrate, distribute an insurtech solution, As well as the after-sales service channel, it is the great differential in the digital industry, and that is where the key to the opportunity that Latin America represents for the world’s great Venture Capitals (VC) that today is betting on the region lies.
And that is the investment hypothesis that the large funds in the region are following. It is no coincidence then that experts like Shu Nyatta, Managing Partner of SoftBank who co-directs its Fund for Latin America of US $ 5 billion, has indicated to Techcrunch that technology in LatAm is often more about inclusion than disruption.
The takeoff of VC investment in the region is correlated with the greater penetration of the internet connection through mobile phones and the rapid growth of e-commerce. On these rails, insurance finds its growth line vis-à-vis the final consumer.
The global context accounts for the momentum: global insurtech funding increased to $ 4.8 billion in the second quarter, up 89% from the first quarter to boost the first half of 2021 before the full year 2020, reported the firm Willis Towers Watson.
At the regional level, investment rounds are gradually increasing and going from one to two digits, always with Brazil and Mexico as the locomotive markets of the region.
However, in the insurance industry there are still a large number of legacy systems that make integration between companies difficult. It is important to invest to renew these old systems towards new technologies, which allow progress with the digitization of processes, integrations and a uniform user experience.
The response of the Insurtech ecosystem to new needs
In this new scenario of changing needs of the insured, traditional companies should pay particular attention to investing in data storage and processing platforms. Without this element it is impossible to deliver the necessary intelligence to digital products.
In many cases, this brings with it the need to invest in infrastructure migration to cloud-native technologies, both for end-user platforms and internal process and technology tools.
The Insurtechs accelerate and strengthen the integration of these technologies and, although there are still barriers to tear down, the future is encouraging. Definitely, this year the insurtech ecosystem will exceed the 35% growth it recorded in 2020, as reported by PwC.
In this way, although at a slower pace than other Fintech verticals, the Insurtech ecosystem is gaining prominence, validating business models and positioning itself as one of the most attractive verticals to invest in. Ultimately, through investment and collaboration, the available range of products will be expanded and processes that add value to the user will be improved.
Co-founder & CEO of 123Seguro
Source From: Ambito
