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By Birgit Fein-Schmalzbauer, Head of Research and Innovation, SAP for Insurance, and Manju Bansal, VP, Global Program Head, SAP Startup Focus

Insurance may not be a sector that’s known for its tech innovations, but that may be changing quickly. The question is: How will legacy insurers handle the digital disruption?

Like the financial industry before it, the insurance industry is now seeing startups and other tech firms move into the space and innovate on different pieces of the value chain that had hitherto remained insulated.

This movement is gaining momentum. InsurTech companies saw investments of almost $2.65 billion in 2015, compared with only $740 million in 2014, an increase of over 250%. Plus, InsurTech deal making is on record pace for 2016; according to CB Insights, in the first quarter of 2016 alone, venture investments in InsurTech companies totaled $650 million.

With their focus on connectivity, simplification, and personalization, InsurTechs are driving the changes that will bring the insurance industry into the digital age.

Established insurers are aware that they need to embrace these trends. For that, they have three options:

  1. Develop the technology in-house
  2. Acquire InsurTech companies that are creating the offers and technology that they’re interested in
  3. Partner with InsurTechs to create mutually beneficial offers

At SAP, we think that the rise of InsurTechs is an opportunity rather than a threat for established insurers. We’ve been working to address traditional insurers’ need for decades.  Yet, because we’re a tech company, we always have a keen interest in innovation.  From our standpoint, both sides stand to benefit if they work together.

Let’s talk about some trends in InsurTech, and then discuss opportunities for both established insurers and startups to gain a competitive edge.

Startups focus on the front end

InsurTech companies see that insurance is a huge industry where there are potential opportunities to disrupt. However, they also realize that they can’t compete with long-established insurance companies – not that they necessarily want to.

In much the way that Uber doesn’t own cars and Facebook doesn’t create content, many InsurTech startups are focusing their attention on distribution. This plays to their strengths of identifying a pain and creating a solution using portals, apps, and the Internet of Things (IoT).

Simplification, not the creation of new technology, is the end goal. Things like APIs, blockchain, and the IoT are simply tools used to reduce complexity. Similarly, big data, cognitive computing, and machine learning are tools that can be used to create more personalized offers.

A few areas that we’re currently seeing InsurTech companies make strides in include:

  • Peer-to-peer insurance, in which friends pool their premiums together
  • Temporary insurance, in which individuals may purchase polices over their mobile phones for the period of time that the polices are needed (for example, while on vacation or playing sports
  • Using IoT to collect data to tailor personalized offers and rates (e.g. Allstate Insurance’s Drivewise app in the US)
  • Offering additional services that may actually be able to reduce risk instead of just offering compensation after a loss (for example, telematics devices that alert  policyholders to car maintenance issues)

How SAP is bringing startups and established companies together

Because we see the immense value in innovation, SAP not only invests in startups, but since 2012 we have also had a global SAP Startup Focus program that works with promising startups and helps them bring their innovations to our installed customer base.


In addition to providing technology, development support and customer access, we collaborate with startup partners to:

  • Facilitate machine learning, artificial intelligence, and data security and development of IoT, mobile app and cloud solutions using Big Data and predictive and real-time analytics
  • Enable APIs to develop new applications that can run on the SAP HANA platform
  • Accelerate market traction by facilitating partnerships between startups and established insurers

One startup we’ve been working with is Meteo Protect, a company based in Paris, France that has embraced the digital transformation of insurance to monetize weather risks related to climate change. Using the SAP HANA platform to analyze massive amounts of weather data, Meteo helps reinsurers price policies for clients that they weren’t previously able to serve.

Synerscope, a company based in Netherlands, is another SAP startup partner that has developed technology to track driver behavior on a car-by-car basis, generating millions of potentially useful data points for insurers.

It’s an exciting time to be in the insurance business.

At SAP, we’re ready to work with both startups and established insurance companies to embrace digital transformation.

Do you have a great idea related to InsurTech? We would love to hear from you. To get in touch with Manju Bansal, the Global Head of SAP Startup Focus, please email him at

To find out what SAP for Startups can do for you, check out our website for SAP Startup Focus or check out this video.

Former Member
0 Kudos

Great article. Looking forward getting more details on the colloboration between start-ups and insurance companies.

0 Kudos

The collaboration of established insurers with innovative startups is the path with highest probability of succes, I believe. Very interesting article!