An expert has said that fintech needs to start delivering on its promise as investment continues to pour into the industry.
Speaking to Insurance Business, Ian Pollari, global co-leader of fintech at KPMG, said that investment in technology is entering a new phase.
“There is a lot of noise around fintech, and we are entering a phase where the sector has to deliver on the promise,” Pollari said. “I think that applies to fintech and large incumbent players that are three or four years in, having set-up innovation labs and infrastructure - but I think the industry in totality needs to be clear on what outcomes they are looking to deliver and ensure that their innovation efforts, investments and partnering is achieving desired results to make it sustainable and credible with management and other stakeholders.”
The latest Pulse of Fintech report, released by KPMG, found that US$8.7 billion of global investment was made in fintech in the final quarter of 2017, across 307 deals.
The KPMG report highlighted that insurtech investment hit record levels of both venture capital investment and deal volume over the course of 2017, with US$2.7 billion worth of investment pouring in across 247 deals worldwide.
Pollari noted that he expects insurtech to remain a hot area of the market over the course of 2018 but added that the sector has been held back by the perception of insurance from outside entrepreneurs.
“Insurtech is an area that has been growing but growing off a lower base,” Pollari said. “Insurance is often being held back because I think a lot of entrepreneurs that look at the financial services industry perhaps have a perception that insurance is more complicated than other segments. From an entrepreneurial perspective that has been a bit of a constraint on attention that might have been more prominent in other sectors of fintech.”
With this in mind, Pollari stressed that incumbents in the industry still have a great opportunity to utilise their experience in the industry and invest in technology.
“I do think the opportunity for insurance companies is recognising that they have got leverageable assets,” Pollari continued.
“Incumbent insurance companies have significant customer bases, data and an ability to assess and underwrite risk, an ability to understand the regulatory environment and [they know] what they need to do to achieve and deliver services at scale.
“The challenge for them, and this isn’t exclusive to the insurance industry, is how do they leverage these assets to fulfill the needs of consumers?”
To hear more about insurtech, be sure to attend the inaugural Insurance Business Insurtech Summit at the Amora Hotel Jamison Sydney on Tuesday, May 08.
This event has been accredited for 5 CPD points by the National Insurance Brokers Association (NIBA).
Check out the full program here.