The next decade of P&C growth will be defined by the carriers best able to shape change instead of just chasing it. Which may help explain the global rise in insurtech adoption and the increasingly critical role of insurtech incubators.
According to Bain & Company, innovation leaders in our industry grow premium revenues nearly twice as fast as competitors—and have expense ratios that average 15% lower. But the quickening pace of change is outstripping the capacity of any single carrier to innovate rapidly and at scale. That’s where insurtech incubators come in.
The Future of Insurtech Will Be Incubated
Growth opportunities for our industry’s most agile players could be significant. Accenture projects that by 2030, $480 billion in total industry revenue will be impacted by innovation. In that same period, $200 billion in projected industry growth will come from new risks, product offerings, and services. The carriers best able to quickly transform existing operations and seize new opportunities stand to capture the lion’s share.
Insurtech incubators are programs designed to accelerate the discovery, validation, and adoption of breakthrough technologies crucial to staying ahead of evolving market demands. They’re not just a US phenomenon, either. Insurtech Australia, for instance, is an organization dedicated to supporting insurtechs in the leading market of a broader APAC region expected to see insurtech grow at a 16.25% CAGR through 2031.
“We see Australia as really bringing together the two strengths of insurtech,” Insurtech Australia CEO Simone Dossetor recently said on my InsurTalk podcast. “It’s a really strong insurance market globally, and then it also has this really great tech proposition” that can work as a test bed for companies before they take their value propositions to international markets.
Incubators as Strategic Discovery Engines
Incubators like Insurtech Australia and global initiatives such as Guidewire’s Insurtech Vanguards program help carriers identify promising solutions, as well as where and how those solutions fit into their strategic priorities. The Insurtech Vanguards program, for instance, scouts insurtech innovations worldwide, and educates regional carriers about emerging solutions—from AI-enhanced underwriting and pricing to weather analytics to telematics-enabled, usage-based insurance, to name just a few.
The program’s InsurPitch competitions, held in Australia, Ireland, Canada, England, the US, and a growing list of countries worldwide, give the carrier community a first-hand look at some of the most compelling insurtech value propositions. For the most promising incubator members, the program provides potential investment, ongoing partnerships, and more. Vanguard graduate and AI-based decisioning platform company Indico Data, for instance, was fast-tracked into Guidewire’s industry-leading PartnerConnect program. Guidewire even acquired Vanguard graduate and AI knowledge management insurtech ProNavigator last fall.
It’s Not Just the Insurtech, It’s the Ecosystem
The value that carriers derive from the kind of insurance-relevant innovation that incubators support doesn’t only come from the offerings of a single insurtech. It also stems from the contribution each can make to more expansive insurtech ecosystems that can be leveraged, combined, and transmogrified into whole new carrier capabilities to meet evolving customer demands, reduce risk, seize new opportunities, and achieve sustainable competitive advantage.
As P&C races to harness this kind of innovation, the role of insurtech incubators will only grow more essential. To learn more, watch the video below:
