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“Incumbents need to keep their eyes out for new entrants that use technology to create a strategic advantage. The size of their share in the next generation of the insurance industry is at stake.” (McKinsey & Company)


There is real apprehension held by the insurance industry about keeping up with entrant technologies. In an attempt to mitigate what some may consider a risk, an increasing number of large global insurers are founding corporate venture capital entities or developing solutions internally. However, these options may not always be viable as they require large monetary and time investment, and thus arguably more risk. Can partnering with existing insurtechs that offer B2B platforms be a more cost effective and efficient solution?

An IBM study from 2017 found that insurtech leaders and C-level executives from traditional insurance companies both believe close partnerships or acquisition can yield the most benefits for both parties:

In comparing insurtechs with the fintech revolution, McKinsey & Company comments:

“Traditional banks and fintechs are increasingly becoming partners in ventures in which the incumbents retain ownership of the end customer, while the fintech help to improve the user experience and customer centric approach. Fintechs have indeed changed the face of banking, but traditional financial institutions are catching up, turning what seemed to be a pure threat into a strategy for the leap into the next generation of financial services.”

The faster insurers and brokers can adapt, the larger market share and earlier benefits can be reaped such as “cost improvements, better capital allocation, and greater revenue generation” (World InsurTech Report, 2018).

So while collaboration offers incredible benefits, one of the common barriers to partnering with insurtechs is concerns about their scalability. The scalability concern is often two fold: 1) scalability of the insurtech company itself is important for its sustainability and ability to continue to deliver for the incumbent in the long term; and 2) the solution’s ability to scale delivery for the incumbent is important for it to grow its capability and reach.

Recommendations for incumbents

What should incumbents look for in an insurtech to ease scalability concerns?

According to Capgemini, a structured approach can help mitigate such issues (image below). Incumbents can help set an insurtech up for success by building digital agility and a digital culture, as well as being clear about objectives to more easily align with the incumbent.

Looking at due diligence/assessment, an insurtech’s ability to implement its solution on a large scale is obviously a factor but can be considered amongst other factors like the strength of their value proposition, the impact on the user experience and, interestingly, the opportunity cost of not collaborating with them.

(World InsurTech Report, 2018)

Scalability is not just about the insurtech’s ability to implement at the desired scale, but the scalability of the insurtech itself. A scalable business will help an insurtech ‘tick the boxes’ of being a sustainable and financially promising company that is around in the long term.

(World InsurTech Report, 2018)

In our experience at JRNY, we believe the following are important considerations from the point of view of both the incumbent and insurtech:

  • Can the insurtech’s platform be integrated easily with the insurer’s legacy systems and business processes through APIs?
  • What is the solution’s existing capacity compared with where it needs to be for the insurer? If there is a discrepancy - what developments to the platform need to be made for this scalability. As an example, digital agents are instantly scalable with the ability to serve virtually an infinite number of end customers at the same time, 24 hours a day. APIs mean that a digital agent platform can easily be integrated with existing systems.
  • The ability of data stores and security systems to match the scale required come into play. Although these are likely provided by a third party, the insurtech should be well versed in the storage capacity and data protection of their chosen provider.  

Something also to consider is how ‘regulatory ready’ an insurtech is. The insurance industry is heavily regulated which can sometimes inhibit an insurtech’s ability to scale quickly if they are not prepared for adapting to regulatory requirements. They should at least be GDPR and robo-advice literate.


The complementary strengths of insurers and insurtechs can provide an opportunity for a successful collaboration with mutual benefits for both parties.

However, a critical assessment of the existing and projected capabilities of an insurtech to scale (in every meaning of the word) is not only crucial to help insurers minimise the risk of partnership, but it will also set the insurtech up for successful delivery in the short and long term.

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