Who is Allianz’s latest insurtech partner Blink?
Taking a leading position in insurtech by choosing to focus on travel insurance specifically, the company couldn’t have predicted how important its work would become in early 2020 when COVID-19 became a force of significant turbulence for the industry.
Blink participated in the UK FCA’s Sandbox programme in 2016 and became an early collaborator of ’s digital innovation arm (Digital Partners). Later, in 2017, it achieved another milestone of being among the first insurtech acquisitions - by .
Allianz and Blink: Placing customer needs at the centre
Policyholder’s flights are monitored in real-time once a ticket has been purchased and any modifications to the journey are instantly reported. Any ensuing problems can be resolved almost instantly, with alternative service choices covered by the customer’s policy terms offered to them quickly, thus mitigating the effects of disruption.
“We have absolute confidence that this new and pioneering Blink dimension will have a very positive impact on our portfolio of travel insurance solutions,” stated Rachel Temperton, Head of Travel & Tourism, Allianz Partners.
“We are delighted to partner with the best Insurtechs to deliver cutting edge solutions and we firmly believe that this will transform the travel insurance experience for our customers.”
A significant moment for Blink
The implications of this partnership were not lost on Prendergast, who enthused the potential for his company to grow in light of such a prestigious collaboration:
“Partnering with Allianz Partners will ramp up our presence and visibility in the UK considerably and we are delighted to be working with one of the world’s largest travel insurance providers in delivering transformative change to their client service offering.
“Allianz Partners has been definitive from the outset in placing customer needs at the centre of the process and are firm advocates for embedded, seamless insurance processes. As a result, we have built a robust service that can process more than 60,000 claims per hour and will support the provision of real-time flight disruption cover for any flight delayed by more than two hours to Allianz Partners and Affinity policyholders,” he said.
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.