The future of insurtech in the eyes of Matteo Carbone

On the occasion of the Fintech Nights Relive edition dedicated to insurtech we had the pleasure to guest Matteo Carbone, founder of IoT Insurance Observatory. We took the opportunity to ask him his point of view on the sector and what effect the coronavirus emergency is having and will have on it.

How has the insurtech sector developed in the last two years and what do you think have been the driving trends?

Insurtech has definitely matured over the past few years. On one side – the startups – we have progressively seen funding rounds with bigger tickets raised by more mature startups. On the other side – insurtech solutions adopted by incumbents – we have recently seen less “toys for CEOs” (the shining tools that are pretty easy to build but lat the time of a press release and one conference) and, instead, more initiatives focused on solutions that can have a concrete impact on the core insurance processes.

What will be the impact of the corona virus on the fintech industry in your opinion?

Let’s separate the answer into two parts. I believe that a lockdown of a bunch of weeks, when the restrictions will be ease, will not have changed customer behaviors and preferences structurally.
The most relevant real impact will come from the recession due to the lockdowns. It will probably increase the focus of incumbent on innovations that have the potential to deliver real impacts on the day by day activities. No more room for “toys for CEOs”. For vendors that have already done POC or pilots with incumbents of solutions that can help in this contingency, there are opportunities for accelerating the adoption. For vendors, it will be more challenging to pitch new clients in the next few months. There will probably be less capital available for new ventures: investors will tend to focus on the companies they currently have in their portfolios.

Will there be differences between Italy/Europe/US?

I’m currently advising insurers in more than 15 different international countries: each insurance market has a completely different story, culture (and bias), and structure. So there will be many differences. I suspect we will see a new wave of new early-stage insurtech initiatives emerge over the recession in the US. Let me elaborate further. Layoffs are starting to appear among existing US insurtech ventures. This trend will put high skilled professionals in the position to reinvent themself…this could create the new wave of insurtech ventures. Some of them will even access to capitals as the economy will start to recover. Startup funding has always been more available in the US than in the European markets.

What would be needed from your point of view today to foster the growth of fintech/insurtech in Italy?

To raise the financial sector innovation culture would be essential in order to foster growth. It is still too diffuse to hear opinions that considers insurtech only a topic for startups or a distribution approach. It’s a pity for a player in the insurance arena today not to pose the question of how to evolve its own model by thinking of which modules within their value chain should be transformed or reinvented via technology and data usage.

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