Munich Re's DP offers valuable glimpse of the broad range of digital transformation Insurtech start-ups address. Choosing 15 to work with and rejecting another 500. 

Like other traditional insurance companies this "skunk works" seeks to identify & support viable start-ups using these criteria.

• If the business succeeds, will it be massive? High risk and small niche don't go.
• What makes us think it can succeed? Where's the demand, where's the distribution?
• Can the partner's team deliver it? We really like teams which mix a business builder, tech expertise, and strong insurance product knowledge.
• Does the team and the idea make us say 'wow!' when we meet them?
• And finally, can we deliver what they need from us?

Insurtech start-ups are no different than those in other segments e.g. IoT, Blockchain. They not only have to survive the battle with other challengers but also fight traditional vendors that wake up to the challenge. Most will fail, some will re-invent themselves and eventually survive, and of the minority that make it:-

• Most will be bought by established vendors
• A small number will themselves become industry gorillas.  

What is sometime ignored is the fact that a significant number of insurance carriers are the ones that will benefit from this wave of insurtech innovation. Munich Re, Allianz, Aviva and others will pick winners and assimilate them in their own technology platforms and products. But others will not successfully transform and just looking at the wide range of insurance carriers  shows the challenge for most to change and meet expectations of customers.

That's not even considering the distribution channels of agents/brokers.

What surprises me is how many currently large and successful carriers will not put in the time to investigate, review and engage with insurtech innovators. They will listen for 10, 20, 30 minutes but hardly longer. They are too stuck up their proverbials to consider the opportunities and threats they face. Too content with current processes, ideas and personal fiefdoms to accept uncomfortable fact.

Then I remember it was ever thus and household names constantly do a Kodak and disappear except for being museums curiosities or cautionary case studies in business schools or HBR magazine.

Of course there is another side to the  story that will unfold and that is the traditional  technology solution providers to the insurance industry.

There is an analogy in the world I have come from- Analytics. Once ruled by Tier One "mega vendors" -

• SAP Business Objects
• IBM COGNOS
• Microsoft
• MicroStrategy
• Oracle

Then along come disruptive technology providers like Qlik, Tableau, Logi Analytics, Sisence, Domo, Birst meeting new demands:- 

• much improved UX
• self-service analytics
• faster go-to-market agile platforms
• addressing full range of personas/users 
• cost-effective licensing models,
• embeddability in enterprise apps

The Tier One vendors won't go away but will hemorrhage business to new rivals and you will see the same in the insurance space.

Look out Tiers One and Two because you cannot maintain current technology and licensing models if you are avoid the hemorrhaging of licensing fees. But the insurance carriers will demand that you do in the same way large enterprises and public sector organisations adopted Qlik, Tableau and the others at the expense of the Tier One Analytics & BI vendors.

Change will blow through the tiers of  insurance platform vendors:

1. Tier 1 players, e.g. Guidewire, Duck Creek etc (of which you probably have 2-5 major players here in P&C) 
2. Tier 2 players, e.g SSP, IDIT (Sapiens), probably 5 -10 different players 
3. Tier 3 players, e.g the startups such as Instanda (http://instanda.com/) and other cloud (only?) based solutions that are built for speed & agility and up in running in no time at all, delivering on the need for speed to market. Likely 10 - 20 different players, with more arriving all the time. 

(Thanks due to Nigel Walsh for this list). 

Interesting times ahead!