2021 was a historic year for investment in insurtechs. Funding reached a record-breaking $15 billion in Q3, according to
Parallels with other industries
There are parallels here with other industries and the pattern of agile and innovative startups leading the way for major players in the insurance marketplace matches the trends seen in the telecom market.
Telecom operators have engaged with startups for several years to profit from their agility, disruptive power and execution speed. One such telecoms operator is Telefonica, which works directly with startups through Wayra, its Open Innovation Hub. Wayra offers access to networks, capital and corporations to help scale telecom startups. Wayra emerged from Telefonica’s understanding that it did not innovate as well as startups so it made sense to encourage an environment where startups can flourish. Telefonica provides access to business development opportunities through its network of global affiliates that would normally be inaccessible to young companies. In return, Telefonica can tap into this innovative ecosystem to deliver disruptive solutions to the company and its customers.
There are also similarities between the growth of insurtechs and the innovation seen by startups in the banking industry.
The importance of startups
Startups drive innovation through necessity with their ‘small company in a hurry’ mentality and they can implement changes quickly thanks to on-demand computing and
Although many startups grow and fail quickly, their value is in innovation across a marketplace, which leads to better services and better value for money for customers. It can drive the adoption of new services and greater uptake of existing services. This innovation stimulates economic growth and creates wealth for investors.