The Insurtech world offers a myriad of opportunities for insurance companies, MGAs, and retail brokers to expand their relationships and touch points with consumers. Consequently, certain insurtechs have identified business models whereby they can monetize new revenue streams by focusing on risk mitigation and prevention strategies before claims occur. For example, Hiotlabs is a Swedish Insurtech providing “prevention as a service” through IoT sensors. These measure the humidity and temperature inside buildings, and empowers its customers to detect water damage early and prevent insurance claims before the situation has escalated. Another example is Matic, which employs an API which integrates with the systems of home insurers and third-party mortgage providers. After a quote has been requested, 95% of the information for the mortgage quote is automatically carried over to the insurance quote, and the end user only needs to answer several questions to obtain insurance coverage.
As this Deloitte report states about future initiatives in the insurance industry, “Ultimately, to futureproof their business, carriers will likely need to expand upon core innovations to jumpstart adjacent and transformational efforts, which could be facilitated by a dedicated team created to pursue new business models and seek alternate revenue streams in parallel with current system improvements.” However, it is very possible that these initiatives, rather than being implemented by an internal team alone, will be conducted in partnership with specialized Insurtechs and related third-party providers. Undoubtedly, this model could enhance the revenue streams of the collaborating companies without requiring them to develop core competencies outside of their traditional competitive advantage. Indeed, it could very well be that these new diversified revenue streams will protect insurers and brokers in the future, once the current ‘hard market’ passes, as insurers and Insurtechs will be forced to evolve beyond more than classic policy products and claims services.
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