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InsurTech 2.0 Opportunities for Monetization in 2023

The digital transformation of the Insurance industry, combined with advances in emerging technology, has disrupted the traditional insurance product stack. This has paved the way for Insurtech startups to leverage technology to tackle specific challenges such as underwriting, risk management, policy management, digital distribution, and more.

Explore more on the Unbundled Insurance Stack and Opportunities

The initial excitement of InsurTech 1.0 experiences has provided valuable insights into the dynamics of this market. As the digital evolution continues, new strategies and approaches are being explored. Early results are positive and can potentially create opportunities for monetization, scale, and success.

5 opportunities with InsurTech 2.0 that you must consider in 2023

  1. Build, Buy and Bolt

To deliver the products and services needed, insurers opt for a combination of build, buy and bolt rather than view them as mutually exclusive options. This applies to technology, distribution channels, and coverage offerings. Each option has its pros and cons.

Build: It involves developing a product or service in-house rather than acquiring it from an external vendor. For example, an insurance company might build its own software platform to manage policies and claims rather than buying a pre-existing solution. Building in-house allows the company to tailor it specifically to its needs, but it is time-consuming and expensive.

Buy: This involves purchasing/licensing a product or service from an external vendor. For example, an insurance company can license a SaaS-based policy administration solution from a vendor that specializes in it. Buying or licensing is quicker and less expensive than building it in-house, but it does not offer the same level of customization.

Bolt: This involves adding a product or service to an existing offering rather than building or buying it. For example, an insurance company might bolt on a new coverage option, such as pet insurance, to its existing portfolio of products. It is a good way to quickly expand an insurance company’s offering without committing significant resources to development or acquisition.

InsurTech startups that recognize this opportunity and invest in a versatile API platform with support for legacy connectors will make it simple for traditional carriers to plug in innovative solutions with minimal time and effort required from both parties.

  1. Competitors to Partners

Early on, InsureTech startups went head-on against the traditional insurers and looked to win customers away with their new range of personalized products, digital purchase options, fast onboarding, and more. InsurTech 2.0 is witnessing a shift from traditional competitors to partnerships between established insurers and InsurTech companies.

For established insurers, InsurTech companies often have expertise in specific areas, such as data analytics or digital marketing, that helps insurers improve their operations or offer innovative products. Partnerships also allow insurers to access new technologies and business models that help them stay competitive in a rapidly changing market.

Insurtech companies get access to the existing customer base of the Carrier, ride on the brand’s trust and reputation in the market and scale faster. The downside is that the Insurer continues to own the end-customer relationship, which can affect the startup’s valuation.

Another reason for the shift from competitors to partners is the recognition that there is room for both traditional insurers and Insurtech companies to coexist and thrive. Insurtechs focus on specific market segments or offer niche products that complement the offerings of conventional insurers.

Whether InsurTech offers its technology as a white-labeled solution to the Carrier or as a branded offering that bolts onto the Carrier’s existing product, having a flexible architecture and robust API framework is essential to take advantage of this market opportunity.

  1. Ecosystems – Going beyond partnerships

Taking the partnership model one step further is the emergence of Ecosystems with InsurTech 2.0. The ecosystems include traditional insurers, Insurtech startups, venture capital firms, technology companies, regulatory bodies, and other industry organizations.

A key aspect of Insurtech ecosystems is the way it facilitates the flow of information, data gathering, and collaboration between participants. It includes sharing data and insights to improve risk assessment and underwriting and developing new technologies and business models that can transform how insurance is bought, sold, and delivered.

Insurtech ecosystems are often characterized by a high level of collaboration and innovation, as different players work together and bring complementary skills to the table to identify and solve problems in the insurance industry.

To get the most out of an Ecosystem, Insurtech Startups need to have a secure architecture that ensures user data privacy and safeguards from external vulnerabilities. Uniquely identifiable attributes need to be masked, zero-trust access policies be enforced, and should conduct regular vulnerability assessments.

  1. Insurance-as-a-Service:

Insurance-as-a-Service (IaaS) refers to the delivery of insurance products and services through a cloud-based, subscription-based model. It allows insurers to offer their products and services to brokers, insurance agents, MGAs, or directly to end-customers on a pay-per-use or subscription basis rather than requiring them to purchase traditional insurance policies.


One key advantage of IaaS is that it allows insurers to offer flexible, customized coverage, enabling customers to choose the level of cover they need and only pay for what they use. This is particularly attractive for businesses and individuals who may not want to commit to a traditional, long-term policy but still want the protection that insurance provides.

IaaS also enables insurers to offer granular event-based or activity-specific insurance cover rather than having to purchase a broader and more comprehensive policy. This can help insurers better meet the needs of their customers and offer more targeted relevant coverage.

Insurance-as-a-Service will be a layer that abstracts the capabilities of the Ecosystem. In addition to policies, companies can access specific expertise like AI-based risk assessment, smart underwriting, and other specialized skills on a pay-per-use or subscription basis.

  1. Too much Data, not enough Insights

The Internet of Things (IoT) and connected devices are generating vast amounts of data to improve risk assessment, underwriting, and other key insurance processes. However, there are several challenges that must be overcome in order to effectively leverage this data in their analytics efforts.

One of the main challenges is the sheer volume of data that is generated by IoT and connected devices. This data is difficult to manage and process, requires specialized tools, skills, and infrastructure for effective analysis. The data from connected devices is highly varied and comes from a wide range of sources, which makes it challenging to integrate and analyze. The quality and reliability of the data and its source add to the complexity.

Finally, there are also privacy and security concerns surrounding the use of data from IoT and connected devices, as this data may contain sensitive personal information. Insurers must ensure that they have appropriate safeguards in place to protect this data and ensure that it is used in compliance with relevant regulations.

InsurTech Startups that deliver reliable data analytics will be the most sought-after entity. Having a highly scalable architecture for compute, storage, and delivery, along with specialized Quality Assurance processes, will be the difference between winning or facing significant exposures.

Trigent Services for the InsurTech 2.0

At Trigent, we stay in touch with the latest developments in technology, shifts in customer preferences or behavior, and emerging business models. As InsurTech 2.0 continues to evolve, we enable InsurTech companies, be it Startups or Growth Enterprises, to gain a competitive advantage with a suite of targeted services.

Our framework for a digital Insurance core enables InsurTechs and Insurers to align their Insurance Service Stack with the evolving market requirements. We have you covered from design, prototyping, custom app development, system integration, deployment, and maintenance. Augment and extend your QA capabilities with functional testing and Test Automation. Accelerate testing with our library of 600+ pre-built InsurTech user stories for instant results.

Evaluate your current strategy and calibrate your plans to make the most of these exciting market opportunities in 2023. Let’s talk

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  • Abishek Bhat

    Abishek Bhat is the Vice President of Business Development at Trigent Software. He enables businesses to adopt strategic outsourcing to make their processes and workforce more productive and improve ROI. A passionate advocate of digital transformation, he guides organizations on their journey towards digital maturity and excellence with a keen focus on QA.

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InsurTech 2.0 – Opportunities for Monetization in 2023