The adoption of InsurTech in the traditional insurance industry value chain

Abstract

Researchers believe that new technologies such as InsurTech (FinTech in the insurance industry) enhance competitive advantage of incumbent insurers by fostering value chain innovation. Scholars agree that the slow pace of digital transformation in the insurance industry and changing customer needs pose a dilemma for incumbent insurers. Incumbent therefore have an opportunity to embrace and collaborate with InsurTech. This study explores the adoption of InsurTech in the traditional insurance value chain. A qualitative and exploratory approach was adopted using data collected through twelve semi-structured virtual interviews. Interview data were analyzed using thematic data analysis. The study found that the rise of InsurTech in the industry has increased the need for innovation in the value chain and the potential to drive innovation in the value chain of existing insurers by innovating components related to competitive advantage, customer centricity, and operational efficiency. This study contributes to the literature defining the role of digitalization in the insurance industry. How to adopt InsurTech innovations into the insurance value chain to improve customer experience and increase efficiency while achieving sustainable competitive advantage by applying Porter's Value Chain and DOI It is now possible to explore what can be done. Another contribution is the expansion