Neil Harrison is absolutely right!
If private equity houses are prepared to invest $14billion in funding revolution in the insurance industry there are better ways than this "hit and miss" method.
By my calculations, it would be possible to completely revolutionise the entire global operations of the largest 50 insurance companies in the world with that kind of money.
Without major risk to their existing IT capabilities, every one of them could achieve, within a maximum of three years all of the following:
- 100% Omnichannel capability for every customer journey and interaction (currently this stands at 4% of insurers)
- Agile ability to get to a weekly (maybe even daily) release cycle of production software
- A "No Code" IT delivery world where business defines their requirements, then watches it materialise in front of their eyes for immediate release. IT staff become heroes not villains.
- AI, Automation and Robotics removes the heavy lifting and repetitive legwork, delivering great outcomes and focussing humans on value added interactions with customers.
They would simultaneously raise NPS scores through the roof, reduce costs by 10's of % and be able to build new products and even business models in days not weeks.
This is not fantasy. Today organisations like Paypal, Cisco, Tokio Marine, RBS, Aegon, AMEX, Allianz and others are doing exactly that.
It is a much better way to spend $14billion!
Some investment criteria into insurtech start-ups “don’t make sense over time”, warned Neil Harrison, global head of claims at Aon Risk Solutions. Harrison told the Insurance Claims Management Conference in Budapest that $14bn had been invested in 550 insurtech start-ups, with a lot of those funds coming from private equity. “They are not all going to make it,” he predicted, noting that many investors have an “attention span of three years”. He urged delegates, when contemplating innovation, to ask themselves: “Is it valuable to the customer? Is it sustainable? If not, it’s a fad.