• We have observed emerging InsurTech trends in a broad variety of product offerings, which could complement or change the insurance business model.
  • In our view, InsurTech has not developed as far as the banking sector equivalent, FinTech, which is already taking some bank market share.
  • As insurance is highly regulated and capital-intensive, with high barriers to entry, we regard InsurTech as complementary to insurers, rather than a substitute for insurers.
  • In our view, the considerable regulatory uncertainty regarding pure InsurTech companies will need to be addressed to ensure security, privacy, fair competition, and financial stability.
  • We do not expect InsurTech to have any rating impact for insurers over the short-to-medium term. In the longer term, the evolution of rating positives and rating negatives will depend on insurers’ preparedness.

FRANKFURT (S&P Global Ratings) Nov. 22, 2016–In a report published today, S&P Global Ratings says that, in its view, big data analytics will need to be tied to industry knowledge if it is to realize its potential to disrupt the insurance business (see “InsurTech:  Buzzword, Emerging Challenge, Or Long-Term Opportunity?”. Although technology start-ups can gather a huge amount of potentially very valuable information about customers, insurers are in a better position to turn this data into a competitive advantage.

During 2016, we have seen a stream of big insurers and reinsurers announcing investments in InsurTech, as they seek to gain advantage through technological innovation. InsurTech encompasses several newly emerging digital solutions, such as the analysis of large datasets, advanced modeling and analytics, and the creation of new client interfaces and tailored products.

An increasing number of insurers have cited InsurTech and digitalization as emerging trends and are rethinking their strategic options for the future. Initially, insurers view InsurTech as a means of pruning costs and are seeking first-mover competitive advantage. Digitalization has the capacity to support insurer efficiency, as is already happening in motor and health insurance, where we are seeing claims being reported through mobile applications. InsurTech is also likely to be applied to increasing the efficiency of in-house back-office functions.

In our view, technological developments are unlikely to affect ratings or the shape of the market in the short-to-medium term. We characterize InsurTech as both a long-term challenge and an opportunity, with material effects that may only start to emerge in 10 years’ time. Only a rating committee may determine a rating action and this report does not constitute a rating action.

The report is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com.  If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on the S&P Global Ratings’ public website by using the Ratings search box located in the left column at www.standardandpoors.com.  Alternatively, call one of the following S&P

Global Ratings numbers:

Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow (7) 495-783-4009.

Press Office Contacts:

  • London: +44 20 7176 3605
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S&P Global Ratings is the world’s leading provider of independent credit ratings. Our ratings are essential to driving growth, providing transparency and helping educate market participants so they can make decisions with confidence. We have more than 1 million credit ratings outstanding on government, corporate, financial sector and structured finance entities and securities. We offer an independent view of the market built on a unique combination of broad perspective and local insight. We provide our opinions and research about relative credit risk; market participants gain independent information to help support the growth of transparent, liquid debt markets worldwide.

S&P Global Ratings is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.spglobal.com/ratings.


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