Brokers ‘can’t put their heads in the sand’ on insurtech

Brokers ‘can’t put their heads in the sand’ on insurtech | Insurance Business Asia

Brokers ‘can’t put their heads in the sand’ on insurtech
Four of the top five fintech firms in the world are based in APAC, a new report has found, as one expert has warned that brokers and insurers ‘can’t put their heads in the sand’ on the issue.

The Fintech 100, compiled by KPMG and investment firm H2 Ventures, found that four of the top five fintech firms are based in China as the market continues to be a global powerhouse in technology.

The list was led by China based Ant Financial with fellow Chinese firm Quindan in second-place and United States-based health insurance firm Oscar in third.

Lufax, ZhongAn and JD Finance rounded out the APAC representatives in the top ten, with 24 Asia Pacific businesses making the top 100 overall and 12 insurtech firms listed.

Martin Blake, and global head of fintech in insurance at KPMG, said that as insurtech “continues to climb,” brokers “can’t put their heads in the sand” as traditional relationships change.

“We’re certainly seeing that the century-old relationship between customer and broker is starting to be disrupted by technology and, obviously, aggregators,” Blake told Insurance Business.

“But at the big end of town, the large brokers … their business has not been disrupted because they’re dealing with more commercial risks. We will potentially see, over time, that business is materially going to change.”

Toby Heap, H2 Ventures, said that the rise of fintech businesses in China only tells part of the story as fintech becomes increasingly important throughout the region.

"The continued dominance of China, which rapidly rose last year to take the top spot, tells only part of the story,” Heap said.

“We are seeing the emergence of exciting fintech players in countries across the world – from India to Israel, from Portugal to the Philippines."

Blake noted that the industry needs to investigate different options when it comes to growth in insurtech. As disruptors continue to spring up across the value chain, insurers need to decide the best course of action to ensure their future.

“One of the questions for insurers … is whether you build, buy, ally or rent some of this capability because the reality is that you don’t need to do this all yourself,” Blake continued.

“There definitely is a big opportunity to form partnerships in a selected way and partner to get access to some of this new capability because if the brokers or insurers just try to do it themselves, then it’s going to take an awful lot of time and the speed at which this change is occurring is breathtaking really.”

The Top 10 companies in the Fintech 100 2016:
  1. Ant Financial - China
  2. Qudian (Qufenqi) - China
  3. Oscar - USA
  4. Lufax - China
  5. ZhongAn - China
  6. Atom Bank - UK
  7. Kreditech - Germany
  8. Avant - USA
  9. Sofi - USA
  10. JD Finance - China

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