To avoid these issues, insurers should designate a dedicated resource to manage the partnership full-time. A project manager can oversee implementation progress, coordinate with internal teams to resolve challenges, and assess whether the technology solutions align with the company’s strategic goals. Having a dedicated facilitator ensures smoother collaboration and maximizes the success of the insurer-insurtech relationship.
Conduct a Comprehensive Background Check
Committing to an insurance tech companies partnership requires substantial investment in both time and financial resources. Implementing new technology can be costly and may take over a year to fully integrate. Additionally, transitioning to a new system often involves fundamental changes to company processes, making it difficult to reverse once established. To ensure a sound investment, insurers should conduct thorough due diligence before finalizing a partnership.
Key factors to evaluate include:
- Security Measures: Data protection is critical. Verify that the insurtech partner offers essential security features like encryption, OAuth, Single Sign-On (SSO), and compliance with regulations such as PII.
- Alignment with Business Objectives: The chosen partner should offer features that directly support the insurer’s goals. For example, if improving agent productivity is a priority, look for automation tools that reduce average handling time and enhance efficiency.
- Implementation and Renewal Costs: Understanding the total cost of investment upfront is crucial for maximizing ROI. Prolonged implementation periods and renewal fees based on Direct Written Premium (DWP) can impact profitability, so insurers should thoroughly assess pricing models before committing.
Define Clear Success Metrics
Measuring the effectiveness of an insurtech investment can be challenging without well-defined benchmarks. Without objective criteria, evaluations may become subjective and difficult to justify. To ensure clarity, insurers should establish measurable success indicators from the outset.
For instance:
- If the goal is to reduce average handling time, define a target reduction and an acceptable success range.
- If the objective is to lower operational costs, determine the expected cost savings.
Setting clear performance metrics provides a structured way to assess progress and ensures alignment between both parties. Regular reviews—whether weekly or monthly—help maintain focus on these objectives and enable timely course corrections if needed.
Conclusion
Partnering with an insurtech provider offers insurers significant opportunities for digital transformation, cost reduction, and innovation. By implementing these strategies, insurance companies can forge partnerships that are both impactful and rewarding.
