Tim Hardcastle, CEO and Co-Founder of INSTANDA, on what will be top of mind for insurers in 2021 and why technology will be critical

“Insurance is the industry of risk. But the depth and breadth of COVID-19 – its impact on society and the economy – was not in insurers’ near-term planning models this year. Insurers and their customers enter 2021 in a world transformed. Physical and mental barriers have deteriorated. Walls separating businesses from customers have collapsed, with the discovery that digital can strengthen customer relationships.

By Tim Hardcastle, CEO and Co-Founder of INSTANDA

“As we enter this new world, insurance must reboot and reenergise. Reboot their business development plans, by investing in sophisticated digital tools and partnering with organisations that accelerate innovation. Reenergise their propositions and offerings, so their products continue to excite and stimulate customers.

“In practice, this means focusing on two areas: personalisation at scale and differentiation through digital engagement. Think Netflix and Disney plus, but in insurance. 

“There is a more urgent pressure behind this need: cost. To avert another drop in earnings, insurers need to accelerate their digitalisation plans so they can take full advantage of reducing costs to industry leading levels of less than $1 per policy.  

“What surprises could 2021 have in store? A potentially unavoidable one is the rapid acceleration of contextual or immersed insurance. Where customers buy insurance through another retail or business interaction – say, a new TV in Tesco – and insurance is embedded and sold through that. This not-so-surprise will bring new businesses challenges that only digital platforms can help solve.

“Another area which is exciting in the year ahead is the industry’s appetite to develop wider service-based offerings, such as pet and cyber insurance which provide extensive service wrappers. A pet wrapper, for example, may include advice on pet health and best practise to keep your pet healthy, with the aim to reduce bills and the insurance claim. This reflects the recognition of serving customers with a wider proposition than simply the claim pay-out.

“Our own business has adapted to respond to the challenge’s insurers faced this year. We’ve accelerated our plans to add more capability to the platform, such as launching our integration marketplace and digital billing and claims. We’ve done so in anticipation of a greater need from insurers to be braver in their approach to meet customer demand.

“Finally, I think the industry can expect a rebounding next year. There has been a downgrade in analysts’ predictions of 2020 results for several major players, as revenues slipped and claims increased. But we are also seeing rate increases in other segments so we anticipate 2021 earnings will rebound.  

“2020 has brought a year of surprises to an industry that has dealt with some of the worst kinds of surprises, for centuries. A lesson it has taught – as surprises often do – is the necessity of adaptability; to be able to respond to customer demand and regulation, quickly.

“To prepare for this new year, organisations need to look at their existing infrastructure and business models and ask themselves: am I ready?”

Over these last three years we have seen how the essence of ‘insurtech’ has evolved. The 300 insurtechs that we…

Over these last three years we have seen how the essence of ‘insurtech’ has evolved. The 300 insurtechs that we had on stage so far, and the 2,500 that we have in our insurtech database, give us a pretty good picture of what has changed. But also of how things will develop in the coming years. Looking back and ahead, we distinguish four waves of insurtech. With each wave driving the future of insurance in a new direction.
By Roger Peverelli and Reggy de Feniks


Three years ago, in 2016, ‘insurtech’ mostly meant ‘challengers’. New entrants were out there to attack the established order. Everyone spoke about ‘Disruption’.

The main driver for this first wave? Eroding entry barriers – due to new technologies. New entrants took the lead in intelligent and innovative use of technology and data, designing new ways of working. New ways of working that solved the frictions that customers experienced when working with incumbents.

Oscar, the famous US challenger, put it this way “We didn’t start this company because we love health insurance. Quite the opposite in fact.”

We actually took a closer look at the value proposition of many of these new players. Almost all of them promise that they solve the main reasons for dissatisfaction.

We listed those issues below. Across the globe, customers have the same kind of complaints about insurance firms. We concluded that virtually all pain points that customers experience are related to ‘simplicity’ and ‘being personal’.

Of course, there is still sufficient room to improve here. But all these issues are in scope of operational excellence. So, it would be fair to say that all these issues should be solved shortly, and in fact, quite a few are solved already. We already see that Net Promoter Scores are improving. Perhaps not everywhere, but we’re getting there.

Maybe this is the reason why so far only a few of these new players succeeded in acquiring a significant market share. Apparently, focus on solving operational issues only, simply is not enough to create a sustainable competitive advantage.

The few winning new entrants are the ones that not only solve pain points but which have a truly distinctive new business model on top of that.

A great example of a new entrant with such a winning distinctive business model is of course Lemonade. We were honoured that Daniel Schreiber, the co-founder and CEO of Lemonade, shared his vision at our recent DIA Amsterdam edition. Lemonade combines AI with behavioural economics into new business models, and moreover, new value for customers.

The impact of Challengers in terms of market share may still be limited. But that does not mean that the Challengers are not important. The impact they have on market dynamics is significant, but on a different level.

Their focus on less frictions and new service levels has changed the expectations of customers. New entrants set new standards. Customers expect the traditional players to offer comparable innovative services as well. This makes incumbents realise, that they really need to step up to the plate, if they want to keep up.