Canadian brokers must re-think competition and pursue Insurtech partnerships

Published: January 19, 2018

Updated: July 24, 2018

Author: Luke Jones

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Insurtech’s are on the rise, and it seems insurance companies are struggling to challenge them or acquire them. However, one expert believes joining insurtech’s is an approach the industry should adopt.

Michael George, president and CEO of Trisura Guarantee Insurance Company, told Canadian Underwriter insurance companies should seek partnership with insurtech providers instead of seeking to buy them.

“If you have gobs of money, lots of capital, and you want to buy some insurtechs and get serious on that side of it, that makes sense,” George said in an interview. “But for most brokers in Canada, they’re smaller shops — they are regional players, mom-and-pop stores, and even a lot of insurance companies have limited capital, too.

“So, they are not going to go out rushing to buy insurtechs. I wouldn’t recommend that to brokers, in part because there are hundreds of [insurtechs]. Which one’s going to be right? You don’t know.”

George thinks small to medium sized companies will be better off pursuing collaborations with insurtechs. However, brokers may have to reassess how they view competition when entering into insurtech partnerships. Traditionally, brokers have only had to compete with other brokers, but that is now changing:

“They may have to start thinking about the fact that they are actually competing with direct writers, for example. Or other potential entrants into the insurance space that may not see the benefit of an intermediary.

“Brokers maybe also have to start getting together a little bit more, and collaborating. Maybe you could have 10 brokers band together on insurtech, and that opens up a whole host of other opportunities for them that they wouldn’t have otherwise just by themselves.”