Winter is coming, as the supply chain problems highlight only too well. On the upside, this week we learn from WTW that M&A activity could be a record-breaker, demand for healthcare cover is up 46% and insurtech funding rounds keep on generating multi-million value deals
START: WILLIS TOWERS PREDICTS AWESOME 2021
The latest report from WTW is predicting that mergers and acquisitions activity this year could well be at an all-time high. That is remarkable after the shock to the world’s economy following COVID-19. It also shows that bigger brands are consolidating, buying smaller rivals, plus forming strategic alliances.
IE’s take on it is simple; technology is levelling the playing field so, if your digital offer isn’t branded well, switched onto social sentiment or tracking the many growth areas within insurance, then you need to buy that knowledge.
RUN: INSURTECH FUNDING
This week saw Cover Genius secures $100m (Australian), Sweden’s app-based home/contents specialist Hedvig bag a tasty $45m and logistics specialist Anansi win $1.5m.
There is still plenty of cash around for the right insurtech concept and once the consolidation process is wrapped up in the UK broker sector, perhaps investment funds and VC backers will be even keener to build up digital brands.
GROW: HEALTHCARE GROWTH
Comparison site Quotezone sent IE some news this week, which stated that demand for private medical insurance was up about 46% compared to pre-pandemic levels.
Regardless of politicians’ soundbites, the likely outcome of COVID-19 is that more people with money are going to set aside a percentage of it each month to buy private health insurance for their families. It will be the new normal, just as GPs are never going back to opening to face-to-face appointments on demand.
The other interesting development long term could be private medical facilities in supermarkets, abandoned High Street office/retail units, opticians or even beauty treatment clinics. For insurers and brokers there will probably be opportunities to develop flexible products that cover part-time medical treatments in a variety of locations.
The key area for IE magazine is scanning and diagnostics, which is where the NHS continues to fall down. Those with money want faster results and consultations. The logical step forward would be for a major insurer to open a chain of scanning centres or partner with a specialist company. Let’s see.
AND FINALLY: AMAZON LAUNCHES
After years of rumours, Amazon finally launched an insurance product this week with Superscript as their partner. The actual product is a sole trader/SME cover, with Directors, Cyber, Professional Indemnity etc wrapped up and sold via Amazon Prime, the shopping addict’s Amazon account of choice.
Is that something the industry should fear? Not as far as we can see. It’s a bit niche in fact.
The big news would be that Amazon had an Alexa home insurance product line, where customers could obtain cover via voice analytics questions and Amazon account details, with a fingerprint/face scan as confirmation of agreement in principle perhaps. But that ‘Minority Report’ style product is possibly a decade away.
Ultimately it is the mainstream consumer that Amazon has won over from the High Street with its low-cost trainers and self-penned 99p fan fiction. It could deliver cheap insurance to the masses, but someone needs to build and underwrite that cheap cover. Amazon isn’t going to pay out claims from its own profits, is it?
Yep, those are the harsh facts of insurance life and on that pricing bombshell, we say have a top weekend.
