2023 is shaping up to be a transformative year in the Nordic insurance industry, as insurers are discovering the benefits of using insurtech solutions to streamline their operations and improve their bottom line.
We are now seeing a rising trend of outsourced insurtech queries to enable the flexibility and scalability it offers. Since most tech solutions are easily customized and integrated with existing systems, it allows insurers to tailor the technology to their specific needs. And easily scale up or down to adapt to demand and market conditions.
I've also noticed an industry drive and readiness to embrace tech products. Generally manifested in a more agile approach to onboarding new products. The industry shows a more distinct desire to evolve the insurance model and interactions between insurance C-levels, lawyers and IT enables faster implementation processes. Which makes me believe a fast time-to-market and not slipping behind competitors plays a major role here.
– Glancing over on the banking industry, which for a long time was considered the most careful one along with the public sector to outsource technology, has now gained momentum. Only by browsing their apps, it's almost possible to see who has captured the full scope of digitization and who has not.
In addition to cost savings and flexibility, partnering up with an insurtech supplier provides security and data advantages. Given how complex it is to keep up with data management, handing over responsibility is now considered protection. To allow insurers not to worry about maintaining systems, invest in expensive security measures, or waste IT resources to keep their data safe.
There are mainly three purposes that almost every insurtech project touches.These are to grow the customer journey, ease administration and ensure regulatory requirements are followed. Self-built development of such products can take years to complete and the risk of lagging behind competitors is inevitable.
Insurers can no longer wait for self-developed products due to a far too slow time-to-market. And this is why I believe we will see more insurers running a combination of building in-house and start cherry-picking outsourced insurtech products this year.