Insurance Partnerships: The Era of Digital Ecosystems

Ecosystems provide a win-win opportunity for incumbent insurance carriers, InsurTechs, and service providers by enabling them to operate in a coordinated fashion and devise competitive insurance offerings by opening new avenues.

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Insurers across the globe are adapting themselves to the new normal of the on-going pandemic, and as a consequence of the same, there is a wave of acceleration in digital transformation efforts. While developing in-house capabilities via process re-engineering, advanced analytics, and data engineering is necessary to transition into a new operating model, carriers are also considering partnering with InsurTechs, service providers/vendors to supplement their digital initiatives.

The future of insurance stands to be profoundly affected by networks and environments as conventional market boundaries break apart. In fact, as per an estimate by McKinsey, Ecosystems will account for 30 percent of global revenues by 2025[1]. The widespread adoption of smart mobile devices, and the rise of always-on IoT devices in the last decade has given rise to a large volume of electronic data, and digital technologies have fundamentally changed consumer behavior and preferences. Currently, in the insurance industry some of the forward-looking carriers are leveraging this unexplored mass of vast electronic data to devise offerings and create customer experiences that are in sync with customer expectations. They are developing strategic partnerships to deliver customer-facing, well-tested digital platforms to collect data, and provide solutions in ways that are attractive, engaging, and intuitive.

There are three factors which are driving these partnerships.

  1. The pace of change and limited bandwidth of the carriers to invest in new age technology and cutting edge talent.
  2. External environment and the peer group which drives the investment into these new tech companies.
  3. The incessant increase in the volume of data available for better decision making, where insurers are facing challenges of consolidation, and innovation which partners (InsurTechs and service providers) can solve in a much better/efficient way due to a less complicated operating hierarchy.

Pre-requisites for a Partnership Ecosystem

There are certain prerequisites for a partner ecosystem to operate successfully. The first one is from a technology perspective.  It is required that an open insurance architecture is built using APIs that facilitate smooth integration of external, and internal processes are vital for insurance carriers. This creates an environment of ‘plug and play’ which makes it easy for eco-system partners to operate in unison with the insurance carrier.

The second prerequisite is on the organization side.  It is imperative that the focus remains on training resources, developing partnership-management capabilities, and setting up agile systems & processes that ensure consistent availability of the integrated customer experience across all the channels in a consistent fashion.  The third and equally important prerequisite is about ensuring legal and regulatory compliance.  It is necessary to strictly follow such compliance guidelines that support operations in an interlinked manner.

Insurance Digital Ecosystem Partnership Possibilities

Based on what can be observed in the industry today, carriers are engaging in various types of partnerships leading to a win-win outcome.  Such types of relationships involving multiple (re)insurance carriers, Insurtech players, innovative technology players and data providers are arising globally.  Creativity in the formation of partnerships has been driven by the need for forming a profitable growth ecosystem and competitive business environment.  As per the classification in the exhibit below, there are four types of digital ecosystem partnerships, while more possibilities are arising on the horizon.

(Source: EXL Service. Click to enlarge.)

Insurance analytics partnership

Many insurance carriers are on the path of having significant digital strategies.  They are aiming to build more agility and flexibility into the organization.  And being a digital business means being an analytics-driven business.  McAfee et al in their book “Harnessing our Digital Future” quote expert studies stating – When things get complex, don’t look to the experts.  Instead, call in the outsiders.

Currently, in the insurance landscape, actuarial, direct digital marketing and digital enablement capabilities are hot areas of collaboration.  The core of any insurance value chain is the actuarial function. In the present day, majority of an actuary’s time goes into data preparation, rather than modelling activities. With the help of modern data practices, business process engineering, and advanced analytics, insurers can enable their actuarial workforce to focus on their core competencies i.e. risk management, and product development. However, this paradigm shift requires a collaborative effort which is better achieved by bringing an insurance analytics service provider onboard. Insurers are partnering with solution providers to develop Actuarial centers of excellence that focus on driving analytics to help carriers seeking lower operating expenses, improved productivity, and more flexibility.  As insurers aim to make the right partnership choice on digital initiatives, they should look at partners that have the right mix of capabilities such as direct digital marketing, omnichannel strategy, B2C marketing spectrum, high precision DTC interventions, optimization of media spends, targeting, and personalization for building superior customer experiences. Moreover, real-time digital intervention along with advanced analytics ability adds to better customer acquisition and retention.

Insurance Analytics partnerships enable insurance carriers to systematically absorb new capabilities without disturbing their existing operating model while the service providers focus on innovating across the carrier’s value chain and channelize their capabilities to actually make an impact in the marketplace. The net result is a hassle-free profitable collaboration for both partners.

Value add InsurTech solution partnership

Since 2017, it can be seen that there is a growth in the number of insurance companies seeking out partnerships in the Insurtech area. Typically, they either want to improve the experience for their agents or end customers or they want to be able to harness the power of data to identify and respond to some untapped opportunities.   Some of them want to bring in a sense of innovation within their organization.  It can be also observed that some insurers and reinsurers are more active than others when it comes to such partnerships. For instance, AMICA Mutual Insurance [Lincoln, R.I.] recently entered into a strategic partnership with a technology company that transforms smartphone photos of any property into a valuable data set for insurance professionals. By leveraging a complete data package through the company’s proprietary technology, Amica will transform the customer experience by dramatically lowering inspection costs and streamlining workflows.[2]

The successful partnerships seem to focus on persistent business needs: to help cut costs, increase revenues, or improve customer experience.  One of the greatest determinants of a partnership’s success is whether the Insurtech provider can understand and assess the carrier’s business needs well enough to address an identified use case. Successful partnerships happen when the insurers lead with the need and prepare a solid foundation for success.  Such partnerships are seen to be well-positioned to unlock new routes to success.

Value add insurtech solution partnerships enable traditional carriers to make a leap in the digital arena without worrying about losing business to the new-age carriers. At one hand, carriers can channelize sufficient funds to innovate and optimize in a smooth fashion, while at the other hand, insurtechs can generate revenue in collaboration with carriers without adding another shop in the cluttered insurance landscape. 

Niche data and technology partnership

For the insurtechs, such partnerships provide a great input on the market needs and the product and opportunity to help them scale and at the same time these partnerships helps insurance carriers to innovate. The considerable value that will be generated from such partnerships in the coming years means it is far from a zero-sum game, and creates more and better opportunities both the partners involved.

One particular class of Insurtech companies that are making the greatest impact on the insurance industry right now are the data providers.  These Insurtech players’ goal is to process and maintain valuable raw data for marketing, underwriting, rating, and claims purposes.  Many of these data providers are increasingly helping insurers to gain insights into their critical business issues and gain a competitive position.

One Insurtech data provider, for example, provides detailed attributes for properties extracted from 3-D images.  Such attributes are being seen to have the potential to change the underwriting process of the carrier and claim handling skills.  In general, the assessment of new business has been one area to benefit from the data solutions that automate manual processes and streamline workflow. Some technology companies focus on the software side of the house, building the apps, systems and solutions in developmental partnership with (re)insurance carriers.  The success of such partnership seems to be driven by the technology provider’s prowess in the insurance domain and the ability of carrier to bring them into the fold of emerging insurance business problems.

Data and technology partnerships can transform the service delivery aspect of insurance carriers. Many insurance firms do not have the expertise or experience to use their large data repositories to build new market opportunities and increase customer satisfaction. Innovative insurtech partners will provide insurance firms with much of the knowledge, experience and versatility required to efficiently get value out of big data sources, append new forms of data effectively.

External data analytics partnership

According to the U.S. Bureau of Labor Statistics, as of December 2020, the unemployment rate for the insurance industry was 3%, which is way below national average of 6.7 %. However, with baby boomers set to retire and new generations entering the workforce, only 4% of millennials are interested in working in the insurance industry and this indicates a huge talent crisis for the future.[3] In addition, according to another recent survey, only 16% of respondents think there will be enough graduates to fill open positions in risk management by 2025.[4] This poses a challenge for the data-intensive future of the insurance carriers as the demand for insurance-savvy data professionals is on the rise, but the supply in the labor market is not adequate and re-training existing resources is expensive. Hence, it makes more sense for carriers to acquire these competencies externally rather than building them in-house.

The need for a relationship is further compounded by the data-intensive nature of the insurance industry.  The rise of social media, company loyalty programs and content marketing has created a boom in external data, both structured answers and unstructured input that insurers are willing to buy or get access to. The use of external data is creating new partnerships and transforming the way insurers evaluate and price risk.  In addition, the partnership with external data providers is leading the ML developments to combine internal and external datasets are changing the way insurers interact with customers, transact business, and design products and services.

Some external data providers are also developing partnership relationships based on self-service data management platform that connects, manages and visualizes a combination of internal and external data across an organization using the data provider’s own cloud based solution.  Another niche category of providers are creating easy-to-use portals for managing sales and marketing data.

External data analytics partnerships can help to reduce skill shortages in the face of a thin pool of potential skills and knowledge, accentuated by baby boomers set to retire and a shortage of skilled candidates to fill the void. Outsourcing the data analytics part can provide the competency depth and save on costs of training and developing competency internally.


Large problems require larger solutions. Ecosystems provide a win-win opportunity for incumbent insurance carriers, InsurTechs, and service providers by enabling them to operate in a coordinated fashion and devise competitive insurance offerings by opening new avenues. Ecosystems establish a symbiotic relationship where traditional insurers gain by getting access to up-to-date technical innovations, while insurtechs & service providers get the required financial leverage to expand their operations. All this while every stakeholder is geared towards a common shared goal i.e. valuable insurance offerings for the customer.

The right partnership choices for the carrier can help establish a strong focus on operational excellence, combined with innovative analytics solutions enabling the carrier to differentiate in the insurance market and grow further in their abilities in many other areas across the insurance value chain.




[1] Ecosystems in insurance: The next frontier for enhancing productivity (

[2] Amica Mutual Insurance Joins HOVER and CoreLogic to Transform Underwriting Inspections (

[3] Three steps to bridge the insurance skills gap in 2020 | PropertyCasualty360


Rahul Nawab and Upendra Belhe //

Rahul Nawab, Practice Leader-Insurance Analytics, EXL Service
Rahul Nawab has over 20 years of experience in leadership and analytics, holding several senior roles in the banking and insurance analytics industry. At EXL Service he is responsible for business development, client engagement and overall growth of the company’s Insurance Analytics business. Throughout his career, Nawab has co-founded several companies and held a variety of senior management roles, giving him a breadth of experience across a wide spectrum of verticals. Nawab was recently nominated as a mentor at Global Insurance Accelerator—a mentor-driven business accelerator designed to foster innovation in the insurance industry. Reach him at
Upendra Belhe, Belhe Analytics
Upendra Belhe, Ph.D. is the president of Belhe Analytics Advisory, helping businesses achieve business outcomes through data-driven insights. He serves as a strategic adviser to EXL Service. He has over 25 years of industry experience, having previously served as chief data and analytics officer of Gen Re, chief analytics officer of Chubb and as a former national director of information analytics at PricewaterhouseCoopers, among other roles. Reach him at

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