Insurtech vs insurance: the new market entrants looking to edge out traditional insurance firms

Among the list of statements heard least often in careers advisory offices, “I want to be a claims handler” must surely rank highly. These days, being part of a working environment that utilises the newest technology and boasts a ‘cool’ company culture is a necessity for most young professionals – and a traditional insurance firm is the antithesis of this.
Or, rather, that’s the perception. The reality is that the insurance industry has undergone a significant disruption: the arrival of insurtech.

What is insurtech?

A subset of fintech, insurtech firms have been shaking up the industry by addressing existing insurance challenges and targeting the pain points of the modern consumer. While they may not have dealt a permanent dent to the sector just yet, they are growing fast and stand to capture a meaningful share of value pools over the next few years.

As new players within the sector, insurtechs already have an advantage over the incumbents, being recognised as the trendier, more modern version of traditional insurance firms. They are acknowledged to be using the most up-to-date technology and digital platforms and can also offer modern, well-appointed working environments.

Can the insurance sector learn from insurtech?

From our recent work with insurtech companies, we’ve learned that they’re taking a very different approach to hiring. In short, they’re looking at the tech giants and learning from their proven talent acquisition strategies. Like Google or LinkedIn, the insurtechs are taking the time to understand the candidate demographic and responding accordingly, whether that means flexible working, new types of benefit or redesigned workspace.

Should insurance be threatened by insurtech?

While insurtechs are certainly at an advantage when it comes to attracting this new wave of talent, they do face challenges of their own. As technologically-centred entities, it is necessary for them to recruit a large number of software developers. However, the majority of these are hired on contract rates because of high levels of demand. Therefore their talent concerns are primarily directed towards acquiring a sufficient number of contingent workers without exceeding hiring budgets.

What can the insurance sector do now?

Speaking to The Times (Raconteur), our director, Susie Turpin, suggested that the focus now is for traditional insurance firms to ensure they are not in denial. The age of insurtech is upon us and if the traditional players want be “destinations of choice” for the new wave of talent, they must change the way the engage with the market.

The industry, Susie suggested, has to become better at communicating the opportunities available to potential candidates. It needs to rethink its employer value proposition and overall employee experience. Otherwise, it risks getting left behind.

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