(Image credit: Medienstürmer.)
In 2022, the insurance sector saw 449 completed mergers and acquisitions (M&A) worldwide. That’s the highest in a decade, up from 418 the previous year, according to law firm Clyde & Co’s insurance growth report. This increase should come as no surprise; M&A can help companies increase their competitive edge, expand their market presence, and optimize their operations. That said, the challenges shouldn’t be underestimated. There’s a lot to manage, from maintaining compliance and safeguarding customer service to integrating systems, databases, and processes.
The good news is that an effective technology suite can facilitate that process, while also accelerating the returns on that investment. Read on for six ways the right InsurTech streamlines M&A.
1. Streamlining processes and facilitating integration
The right InsurTech platform can smooth the integration of purchased companies, facilitating automated and standardized processes across different lines and business types (such as wholesale, retail, and reinsurance) as they’re acquired.
2. Cybersecurity and Risk Management
An essential aspect of the M&A process is assessing risks, particularly in the realm of cybersecurity. Merging systems or migrating sensitive customer information from one platform to another can increase an organization’s vulnerability to a cyberattack. The presence of a platform with robust cybersecurity measures is key to mitigating those risks.
3. Cross-Sell/Upsell Opportunities
An acquired brokerage presents a great opportunity for upselling or cross-selling to new clients, but identifying potential opportunities can be challenging. The right system can help identify potential new business by highlighting companies to which they have not offered certain insurance products.
4. Consolidating Data for Enhanced Accessibility
During M&A, consolidating and integrating data from disparate systems across different business units and regions can be costly and time consuming. These systems often store data in different formats, making it challenging to match them to an existing system’s schema. The right system can automate this process, instantly matching and integrating newly acquired data.
5. Delivering Better Customer Service
After acquiring a company, delivering world-class customer service is crucial. Customers may feel loyal to that business, and there is a risk of squandering that good will during the transition. Leveraging technology that enables better customer service and quick responses can help to ensure those customers stay on.
6. Compliance and Regulatory Adherence
Regulatory compliance is another pivotal aspect of M&A. The right platform will support ongoing standards and ever-changing regulations, allowing you to navigate the M&A process with confidence.
InsurTech as an Investment
For companies seeking acquisitions, the right InsurTech can optimize that process from start to finish. At the same time, InsurTech can make smaller companies more attractive to potential buyers. Whatever side of M&A your company is on, effective InsurTech is worth the investment.