Connecting and collaborating

Connecting and collaborating

Munich Re believes Australia can lead the way through insurtech-inspired change and disruption

By John Deex

Reinsurance giant Munich Re has long been an industry leader in innovation. Its Digital Partners division offers expertise and capacity to insurtechs, to create “comprehensive, go-tomarket partnerships”.

Here in Australia, Sydney-based Chief Operating Officer Simone Dossetor tells Insurance News she sees the reinsurer’s role “very much as connectors”.

“There are several ways we contribute to supporting the advancement of insurtech, including through community involvement and partnerships,” she says.

“Munich Re is a founding member of Insurtech Australia and continually looks out for insurtechs to introduce to our clients.

“One of our local insurtech partners is Cover Genius, a fast-growing Australian company offering integrated insurance solutions for online booking platforms.”

Ms Dossetor says Cover Genius is just one of many insurtechs Munich Re supports globally through its Digital Partners business, “which combines Munich Re’s financial depth and experience with a comprehensive, go-to-market partnership for digital disruptors”.

And she sees Australia as a potential global insurtech leader, thanks to its vibrant industry ecosystem and “healthy level of collaboration”.

“When you compare the industry to fintech, owing to its nature, we are more reliant on each other for shared expertise and resources to manage risk and build financial strength,” she says.

“While in some areas we compete, in many more we are partners and collaborators.

“With continued support from the industry and government, I believe Australia can develop as a leading insurtech hub for the Asia Pacific region.”

Incumbent insurers are working well with insurtechs, she says, with some spearheading initiatives such as innovation labs and venture funds.

On the other side, insurtechs need to understand that they are unlikely to succeed alone.

“Insurtechs must have a clear plan for growth and to achieve scale quickly at the outset. While many have great ideas, they quickly realise they need a depth of industry knowledge, data, expertise, and the right partnerships to grow and scale.

“Given the importance of partnerships to achieve scale, it is vital to consider these carefully and have a global mindset early on.

“Generally, [incumbents] are looking for start-ups at an early stage where they can shape and further the business through their expertise while also injecting capital. I believe we will continue to see more of these kinds of initiatives and further in-house innovation by insurers themselves.”

Ms Dossetor says the COVID pandemic has opened up opportunities for insurtechs, thanks to the shift to remote working arrangements and an increasing focus on virtual claims assessment and processing.

“Many insurers have struggled to bring manual-based systems up to date fast enough, which has created an opportunity for insurtechs to play a role.

“As with all industries, the global pandemic has rapidly accelerated digitalisation and the openness to it. Most companies have been forced to adopt new technologies and ways of working to maintain their operations and meet customers’ needs.

“This has also sparked an awakening of the fundamental importance and value of data to businesses and the need for more sophisticated strategies to manage and leverage it.”

Another area of opportunity, but also challenge, is the increased focus on regulation and compliance.

“While presenting an opportunity for innovation and positive change, it has also somewhat distracted from and slowed progress in insurtech innovation, particularly in distribution.”

And climate risk is always a focus for the sector – and Munich Re.

“This is of increasing importance for financial services companies across the board, and insurers have a decisive role to play in recognising and developing solutions to respond,” Ms Dossetor says.

“There is more opportunity for insurtech innovation in this space, which remains a key priority for Munich Re.”

Advances in technology will continue to bring significant change and disruption to the industry, with insurtechs playing an important role in challenging the status quo.

“As insurers we have typically been very good at looking backwards, analysing the past to plan the future. But the pandemic has taught us the importance of looking forward, building to be nimble, and continuing to innovate.”