The routes to a digital future are many and varied, but for insurers the question is how to get there?
A new survey by Willis Towers Watson of 200 senior-level insurance executives offers some insight into the way forward.
The findings suggest that M&A and partnerships are likely to trump internal investment as insurers look to deliver digital transformation.
Almost half (45 percent) of respondents to the survey signaled a clear preference for acquisitions as the way forward to gain digital capabilities.
By contrast, fewer than one in five insurers (17 percent) said they have a preference for internal development.
That’s not to say that internal innovation efforts have no place at these insurers, according to Willis Towers Watson, it’s more about getting the balance right between organic and inorganic growth.
Well over one-third (38 percent) of survey respondents say they have no preference between the two routes. In other words, they will use both acquisitions and internal innovation as the circumstances suit.
As insurers embrace a more outwards-looking approach to innovation, the survey suggests that traditional M&A deals are not the only option.
As Willis Towers Watson says:
“Many insurers are investing in a disparate range of technologies via venture capital funds – either through their own in-house venture capital arms, or third-party funds. This may be an attractive way to make a number of small bets on nascent innovations, rather than betting the house on an as-yet unproven technology.”
The survey found that one-third (31 percent) of respondents from the property/casualty insurance sector have set up a corporate venture arm already, while another third (32 percent) are considering doing so.
Innovation was a key topic of discussion at the Insurance Information Institute Property/Casualty Insurance Joint Industry Forum held yesterday in New York. For coverage of the forum go to the I.I.I. website.