The granting of an insurance license to Zego, the first for a UK insurtech, is a major milestone for the sector in the country, proving that innovation is here to stay and opening a highway for other novel products.
Zego offers flexible, on-demand motor insurance for the gig economy, with Uber and Deliveroo among its clientele. GlobalData’s Thematic Research: Digital Challengers in Insurance report finds that on-demand insurance is one of the areas in which insurtechs are excelling.
Go deeper with GlobalData
Consumer expectations are changing, largely inspired by their experiences in other industries, including retail and the online channel. In particular, insurtechs offering on-demand products have been able to narrow the gap between the products and policies on offer and customers’ needs and expectations, an area where incumbent insurers have fallen short. As such, insurtechs offering on-demand insurance are providing customers with insurance cover only as and when required.
Like many other insurtechs, Zego had relied on partnerships with incumbent insurers such as reinsurer Swiss Re. Insurtechs operating under third-party licenses are forced to comply with their partners’ rules. As digitalisation makes its way in, partnerships in insurance have become increasingly common. GlobalData’s report explains that incumbents have turned to tech-savvy insurtechs to enhance their products, with partnerships facilitating a greater level of customisation. This way, incumbent insurers can make their products more relevant to customers.
Now that it holds its own insurance license, Zego intends to create its own policies while continuing to work in tandem with other insurers. Changes to products could be carried out in just 24 hours. More importantly, Zego may now collect external data to assess a customer’s true level of risk and offer policies priced to reflect this.
The fact that Zego has its own license signals that insurtechs are here to stay. Looking at other geographies, the US stands out for boasting several insurtechs that have already been awarded licenses, including Clover Health, Lemonade, and Root. Licensed insurtechs are able to launch new products that are not restricted to third-party requirements. Thus, a new wave of innovative policies could well be underway, further increasing the level of competition in the industry.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
Related Company Profiles
Clover Health Investments Corp
Swiss Re Ltd
Root Inc