NEWS
Market for insurtechs is maturing: but not all will make the cut
Winners will be the innovators who ensure profitability for risk carriers: Descartes.
The insurtech market is evolving, becoming more mature and robust. While competition is rife, the future will see a mix of winners, survivors, and those that fade away. That is the view of Tanguy Touffut, chief executive officer of Descartes Underwriting.
Touffut discussed a variety of topics, including the allure and potential of parametric insurance in today’s market, with Monte Carlo Today.
“The market is becoming more mature and healthy for insurtechs,” he said. “But in the end, there will be winners, some will survive and others will disappear. Key to this will be the customers, who will play a significant role in what the future of our industry looks like.”
He added: “Winners will be those who can bring new technologies, new innovations and a different view on how to serve clients and brokers, all while making sure that risk carriers will be profitable in the end, otherwise the system will collapse—which some insurtech players completely forget.”
According to Touffut, it is this ability to create a “win-win” situation for the insurer, the broker and the insured that makes parametric more attractive in the current market.
“In parametric, our aim is to improve the economics,” he said. “Reducing the expense ratio and loss-adjusting fees is very important. We need to make insurance contracts more transparent too.”
“Reducing the expense ratio and loss-adjusting fees is very important.”
Tanguy Touffut, Descartes Underwriting
He thinks parametric insurance is great a solution to bring fresh capacity in markets that are under immense pressure, such as business interruption and cyber.
Touffut highlighted that with increasing exclusions and complex wordings in the face of rising exposures, there is a pressing need for innovative solutions and technologies that meet the expectations of the entire ecosystem, not just insurers.
“The market has been tough. It has been very brutal to deal with more exclusions, higher deductibles, lower limits and higher rates,” he explained.
Looking ahead, he expects a surge in new product launches, revealing that Descartes is gearing up to roll out offerings beyond weather-centric ones next year.
On the growth front, Descartes has charted an aggressive strategy. Topping the list is a foray into the cyber insurance market. Second is to create “the largest team dedicated to nat cat modelling in the world”.
The company is considering a significant workforce expansion, with plans to open more offices in the US, building on its existing presence in Japan, Singapore, Sydney, and locations in Europe and the US.
Images, from top: Shutterstock / Quardia