This week we take a look at a “corporate startup” in the InsurTech space, Digital Partners at Munich Re.
What is Digital Partners at Munich Re?
Digital Partners at Munich Re provides insurance products to disruptive insurance distribution businesses.
What problem does Digital Partners at Munich Re solve?
In early 2016, Oxbow Partners surveyed a number of disruptive insurance distribution businesses on behalf of Munich Re and asked them what their ”pains” were. There were two major issues:
- It was easy to find someone to speak to at an insurance company, but almost impossible to find someone who would do anything. Employees moved at a different “clockspeed” to startups and lost all focus when a short-term opportunity landed on their desk.
- There were no insurers who could provide product in a neat way. This led to low conversion rates between acquisition and conversion as the customer journey broke down.
Context: The problem in InsurTech is that startups are beholden to corporates for products. This is in contrast to other areas of fintech where startups often have little need for the corporate – for example international payments providers need a bank account at each end but can do all the rest. As our post on p2p models explains, insurance needs the corporate balance sheet even in p2p.
How does Digital Partners at Munich Re solve these problems?
First of all, Munich Re has built Digital Partners separate from the rest of the business. Some might think that this is “gimmicky” – the team do indeed wear jeans to work and some have even grown a beard – but it has been critical to aligning the team’s culture to that of its clients.
Second, Digital Partners has built a market-leading and, we believe, unique product platform that makes anything from standard to innovative products available to digital startups. The team has designed this platform with startups in mind, for example creating standard APIs that allow it to integrate easily with its chosen startup partners.
What has Digital Partners at Munich Re achieved?
Digital Partners is still in its infancy, but 2016 saw some of the fastest set-up work we’ve ever observed in a corporate. The business is now established with teams in both London and Cincinnati and it has announced no less than 8 partnerships with startups. They are listed here including the Bought By Many partnership, which was announced early this year.
The Oxbow Partners view
We are biased: we helped Munich Re design and build this business using our Agile Strategy™ methodology. It is, therefore, perhaps predictable that we believe that Munich Re has positioned itself smartly in the InsurTech space. It has a truly unique “honeypot” to attract startups with a tangible proposition delivered at speed.
The big unknown is whether InsurTech startups will disrupt insurance, or whether the current activity is merely hype. This will affect how Digital Partners develops – but the beauty of having flexible, legacy-free technology is that Digital Partners will be able to pivot and follow the trends.