How will insurers be impacted by the shift towards the ecosystem economy?

In the last decade, digital platforms have experienced immense growth, giving rise to sophisticated consumer ecosystems across nearly every industry. In insurance, new entrants have been particularly successful in capitalising on this trend, with some of the most recognisable, like Revolut and WeChat, graduating from start-up to household names in just 10 years or less.


Insurtech start-ups make up a tenth of all companies that have achieved unicorn status in the global fintech space, making the sector among the industry’s strongest players.

Data from the Centre for Finance, Technology and Entrepreneurship (CFTE) 2022 


Interestingly, the shift towards ecosystems goes beyond just tech-led unicorns. In fact, it reflects a broader move away from vertical integration and towards compelling new value propositions from independent, specialised and modular players.

The result? A radically changed economic landscape. We’re seeing this already in a range of sectors from eCommerce and hospitality, to health and mobility. And within the next decade, no sector will be left untouched.

The consumer ecosystem

For insurers, there are two main ways to engage in the ecosystem economy: as an orchestrator or as a complementor.


Orchestrators act as the ecosystem’s linchpin by offering a unique anchor proposition. They establish the ecosystem’s standards across customer experience, technology, data and operational excellence, and design the commercial model to which complementors and consumers adhere. 


Complementors are specialists in making the ecosystem’s value proposition more compelling and engaging. Every ecosystem hinges on the versatility of its complementors. An ecosystem can house hundreds or thousands of complementors, depending on its nature and market (e.g. smart-home systems, large marketplaces or mobile operating systems).  

Orchestrator vs. Complementor

What’s exciting in this space, is that there are already some strong examples of insurers that are now orchestrating large, successful ecosystems, such as Ping An-Good Doctor and Discovery Ltd-Vitality. However, it is a common misconception that “leading the way” as the orchestrator of an ecosystem is the only real way to prosper in the ecosystem economy. The role of the orchestrator is a demanding one – requiring a strong brand, a highly entrepreneurial culture, an open technology platform and operating model, and a unique way to attract customers into the ecosystem. For most insurers, building these capabilities is likely a daunting undertaking. And success is far from guaranteed for those that do try.

Looking at the odds of success, many insurers opt to play as complementors instead. As a lower-risk entry point, and one that is better aligned to the core competencies, it is a more viable pathway to building a consumer ecosystem.

House purchase ecosystem

Diagram of mortgage aggregator ecosystem

Above is an example ecosystem, built to deliver a smooth experience for a customer purchasing a home. The orchestrator (a mortgage aggregator in this case) delivers the ideal bundle of services with the help of its complementors so that the customer can satisfy all their needs through a single ecosystem.


Unlocking the potential of an ecosystem, as a complementor

As a complementor, it can be tempting to focus on entering the most established and successful ecosystems. It’s the allure of unlocking a once-in-a-lifetime opportunity of their magnetic power and exponential growth. While this might work for some, a strategy like this is not sustainable for the entire insurance sector.

Firstly, amongst the large established ecosystems, power firmly resides with the ecosystem, and competition amongst insurers to win mandates is high. This can lead to razor-thin margins and exacting standards around the service offering. For some insurers, this sacrifice will be worth making due to the scale of the opportunity. For others, it may mean focusing on the long tail of smaller-scale ecosystems, which can collectively still represent a substantial opportunity.

For instance, let’s look at the data from a 2019 Statista report on the most popular mobile shopping apps in the US. eCommerce giants like Amazon, Walmart and eBay reach 80%, 46% and 33% of the population on their own, respectively. Being a complementor in an established ecosystem with any of these leading orchestrators would ensure reach, but would also entail stiff competition with other insurers for a slim margin and limited access to new customer pools. 

On the other hand, if an insurer were to complement multiple small-scale orchestrators (think Groupon, Etsy, Domino’s, Wayfair, Macy’s and Home Depot) in their ecosystems, they would reach approximately the same number of people (~80%), make better margins and access more customer pools with less competition.

Most popular e-commerce apps in the US in 2019 by reach


Secondly, the ecosystem landscape is far from mature, and only 15% achieve sustainability in the long run.

This makes it hard to identify the winners and losers. And with many ecosystem startups backed by patient venture or private capital, it can take years to distinguish between the two. So, by the time a winner has emerged, the opportunity to participate in their ecosystem may have already gone.

Embracing the ecosystem economy

Participation in a portfolio of ecosystems is critical for insurers looking to capitalise on the rise of the ecosystem economy. However, this approach can only be effective if the technology platform and operating model can readily scale to dozens, and potentially hundreds, of different ecosystems in a low-cost way.

While this enticing opportunity may already be on the digital transformation roadmap for many insurers, by the time it arrives, potential first-mover advantages in the ecosystem economy may have slipped away. In recognition of this, many of the leading ecosystem insurers globally – such as Swiss Re and Wakam – are taking a greenfield approach to embedded insurance.


By liberating these ventures from the core insurance business, they have been able to focus on leveraging ecosystem-specific solutions and partnering with digital ecosystems at a breakneck pace.


For insurers looking to join established players, the ability to customise and tailor the experience for each ecosystem will be critical. Ecosystems do not want to be used as just another distribution channel. Instead, they are increasingly looking to co-create unique propositions that use insurance (alongside other products and services) to deepen customer affinity. This will result in greater demand for customisation and co-creation of insurance products and experiences.

The implications of this on the technology and operating model architecture will be profound. Across the insurance sector, ecosystems have typically been designed with a focus on efficiency and stability on large enterprise platforms instead of flexibility and agility at scale. To meet the needs of the ecosystem economy, insurers will therefore need to augment their platforms with new, specialist capabilities. This is a resource-intensive undertaking, and many insurers spend years testing and rolling out these products in order to enter the ecosystem economy, by which time an opportunity may have passed.

By partnering with a data-driven embedded insurance specialist, insurers and business service providers alike can release new, targeted and customisable insurance products to market in half the time. A dedicated insurtech platform like Kanopi is a plug-and-go option that acts as a conduit, allowing insurers and other ecosystem players to co-create value by offering smart insurance as an intrinsic part of the customer journey – without the hassle.


Overall, the ecosystem economy is set to have a formidable impact on insurance, with sector-level impacts on distribution, customer ownership and product innovation. 

For insurers willing to make the bold steps into this new world, the rewards from new markets and profit pools will be unparalleled. But in the process, insurers will need to prepare themselves to be similarly transformed, in terms of value chain participation, technology, operating model and culture. Partnerships with ecosystem providers and specialist enablers that can accelerate this internal transformation will therefore be critical.


About Kanopi

Kanopi is one of the top 50 companies globally, championing embedded insurance and helping insurers every day. We do this by enabling them to overcome the hurdles of legacy infrastructure, integrate with multiple third-party platforms and build seamless user journeys for customers. 

Building a strong digital strategy is the first step to success in a highly competitive insurance landscape. Get insights straight from industry experts and leading insurers in Kanopi’s on-demand virtual roundtable: Innovating for resilience

CTA for on-demand roundtable

Kanopi to host embedded insurance roundtable

Insurance News Australia | 25 July 2022 

Insurtech Kanopi will host a virtual roundtable discussion on the future of embedded insurance on August 22.

The panel will feature IAG EGM Partners and Platforms Luke Boyle, Sønr Founder and CEO Matt Connolly, and Embedded Finance & Super App Strategies Founder Simon Torrance. It will spotlight embedded insurance and how its influence has transformed the industry, and the gradual shift towards an integrated future for insurers.

“With insights from these key players in the industry, we expect the roundtable to elicit interesting discussions about the evolution of embedded insurance,” Kanopi CEO and Founder Nigel Fellowes-Freeman said.

The discussion will be an opportunity to explore themes like evolving customer demand in a post-pandemic world, protection gaps and the role of insurers, he said.

Kanopi says there is a “golden opportunity” for non-insurance brands, enabled by new technology, to “bake” more and better protection into the everyday lives of customers, potentially helping to address underinsurance. Insurers will be able to identify new distribution opportunities, untapped value pools and partnership possibilities.

The roundtable will explore how embedded insurance works today, how it needs to evolve, and what pioneering players are achieving.

What are consumers looking for in insurance in 2022?

Consumers across the world are slowly emerging from crisis mode after two long years spent in the grip of the COVID-19 pandemic. But the world they’re re-entering is one that’s been fundamentally altered. Over the past two and a half years life has been in fast-forward mode, requiring us all to rapidly change the way we live our lives. We have ingrained new habits in the process, which have led to blurred lines between online and physical, and stability and crisis for consumers.

Today, consumers are acutely aware of the day-to-day risks they face and are also expressing growing uncertainty about the future. A climate like this presents a ripe opportunity for insurers to help consumers build stronger, more resilient lives.

In this post, we’ll explore how insurers can capitalise on this opportunity by calling out 6 key things consumers want from their insurance in 2022.


#1. An insurer they can trust

Trust is the cornerstone of providing effective insurance, the proof that help will be provided when things go wrong. Yet studies consistently show that consumers do not see insurers as trustworthy with half not trusting insurers to meet their basic needs.

Graphic depicting a percentage statistic


For insurers, having an established, familiar brand name is no longer enough to create trust. These days, the way to build trust with consumers is through transparency and equality. It creates a feeling of reciprocity with consumers.


Consumer trust in insurers vs. other sectors [US]
Source:  DXC 2020 Insurance Survey report


Insurers can make material progress toward building consumer trust in just two practical steps:

  1. See how every customer experience can be made less interrogative. Identify high-risk consumers and claims using targeted deep dives, instead of subjecting all consumers to the same level of extensive diligence. This creates a better foundation of trust without compromising indemnity control.
  2. Explore propositions that shift insurance away from managing information asymmetries towards shared value. A focus on prevention, like connected health insurance, has been highly influential in spearheading this mindset shift and reinvigorating trust in the sector.


#2. Covers that they can be confident in

Even though consumers are becoming more aware of the growing risks they face, they don’t show much motivation to address these risks using insurance. This represents a clear barrier that consumers still face in understanding and being confident in finding the right covers for them.

A disconnect has emerged with other sectors: experiences and propositions outside insurance are getting simpler and easier to understand, whilst the insurance sector remains highly reliant on extensive terms and conditions that customers only truly understand at the point of claim.

Moreover, it is proving hard to break this paradigm and simultaneously navigate the regulatory frameworks that govern distribution and conduct risk more broadly. For example, regulatory changes around personal advice have been highly effective in reducing poor conduct across the globe but may have also increased the cost of advice and reduced availability in the process.

Nonetheless, insurers still have several solutions available to increase customer confidence in their covers. 

For some insurers, the solution will be to focus on covers with easily understood, pre-defined payouts and triggers. Parametric products and micro-insurance are pioneering these solutions to successfully create new premium pools


How the COVID-19 pandemic has changed customer needs


For others, the solution may lie in better signposting of what consumers are covered for by using simple digital tools to supplement the key documents. This can make it easier for customers to find the right cover for them under general advice and feel confident before the point of claim.

Embedded insurance offers an opportunity to take this one step further. It provides insurers with a way to seamlessly engage with consumers and address their needs in real-time. Not only does this improve how well information about insurance resonates with consumers, but insurers also benefit directly from the trust halo of the ecosystem they’re embedded in. Together, this increases customer confidence greatly.


#3. Value for money

This one almost goes without saying – consumers expect to pay a reasonable price for their insurance products. But this doesn’t mean insurers have to be the cheapest in order to win. Instead, the focus should be on designing products and retail pricing strategies that factor in customer demand and understand the key parts of their products that consumers are willing to pay for. 

Police officers surround a subway exit



Consumer perception of “fairness” of pricing is heavily influenced by what they perceive as “value for money”.



This often comes into play during renewals, because at this point customers count on being rewarded for their loyalty. Insurers are expected to keep this front of mind by both customers and regulators when planning overall pricing strategies because of its considerable impacts.


#4. Delightfully simple experiences

Consumers know insurance can be complex, but when insurance feels unnecessarily complex that’s where a disconnect occurs. But does that matter when the switching rates across most insurance lines are fairly low? The speed at which experience-led disruption has changed the competitive landscape in retail, entertainment and travel suggests that it does.  

Digital has played a transformative role across these sectors and is set to be similarly disruptive in insurance too. Now, this does not mean getting rid of the human aspect of customer interactions in insurance completely. Rather, digital interactions will be used to eliminate the frictional experiences and costs across all touchpoints, with personal assistance provided for high-value, high-emotion moments with customers. This can be done through dynamic, personalised journeys that use machine learning to provide a targeted customer experience.

Embedded insurance is leading the way in this drive towards simplicity. It’s replacing generic customer journeys with ones that have been tailored to the major customer segments of each distribution partner and their associated data profiles. All within a framework that readily scales across multiple partners.


#5. Beyond protection

Insurance has always been a way to protect policyholders when things go wrong. And while this has become an integral part of life, it tends to be a “set and forget” experience for most consumers. 

The issue particularly hits home for the most valuable customers – those who never claim – who understandably struggle to engage with their insurer.

Over the last 5 years, insurers across the globe have been disrupting this paradigm by moving beyond protection into prevention

Health insurance, in particular, has been a pioneer of this trend, leveraging wearable technology to transform health insurance into holistic wellness packages. Such propositions are gaining traction across the broader insurance sector, but they remain a fraction of the total premium pool.

However, that is set to change as consumers emerge from the pandemic with heightened appetites for proactively reducing risks instead of just insuring themselves in case something bad happens. This will unlock a new, unmet customer demand that will turbo-charge growth in propositions that go beyond protection.

The result? A transformative win-win opportunity for the sector.

In the short term, preventative propositions will improve margins through associated indemnity savings and better customer retention rates. In the longer term, competition is likely to drive these benefits back to consumers in the form of lower premiums, improving affordability and reducing the protection gap.


#6. Purpose-driven insurance partners

Today, consumers are taking their business to purpose-driven businesses who share their values and are committed to more than just the provision of products and services. 

So far, customers have made this shift mostly in sectors with negative ESG credentials, like those with high carbon footprints. But increasingly, they also want to know how the brands they use contribute to a healthier society and environment. And insurers are no exception.

Graphic depicting likelihood of consumers to switch service providers based on ESG initiatives
Source: Insurers May Miss the Nuances of Consumer Views on ESG – Bain 2022


Insurers have been making encouraging progress on this count using their position as major investors in the economy to promote a greener, more sustainable future.

But in other areas, progress has been neutral at best. For example, while greater segmentation and pricing sophistication has improved margins, it has weakened the role of risk pooling, making insurance unaffordable for higher-risk consumers. As an overall sector, there is clearly much further to go in balancing commercial and societal goals.



For most insurers, this will mean extending their services beyond that of a traditional service provider to become a company that is helping to build a more resilient future. This will involve redoubling efforts around environmental goals like net-zero, as well as new programs that develop resilience in local communities, which customers can more readily relate to. 


Delivering on all these customer expectations is a daunting prospect. But in a world that has become ‘winner takes all’, the rewards for moving fast will be unparalleled. Insurers need to think carefully about where they focus their efforts, how they can leverage partnerships, and how they can build the capability to proactively address changing customer expectations.


About Kanopi

Kanopi is one of the top 50 companies globally, championing embedded insurance and helping insurers every day. We do this by enabling them to overcome the hurdles of legacy infrastructure, integrate with multiple third-party platforms and build seamless user journeys for customers. 

Building a strong digital strategy is the first step to success in a highly competitive insurance landscape. Get insights straight from industry experts and leading insurers in Kanopi’s on-demand virtual roundtable: Innovating for resilience

CTA for on-demand roundtable

Is this a new age of insurance industry partnerships?

MELBOURNE – 13 APRIL 2022– Kanopi is proud to be an associated sponsor at Insurance Business Australia‘s Insurtech Summit 2022, where insurance leaders from some of Australia’s most notable brands will showcase the tools, tech, and strategies shaping the future of the insurance industry. 

Continue reading “Is this a new age of insurance industry partnerships?”

Federal Budget: The insurance industry reacts

MELBOURNE – 31 MARCH 2022– Insurance Business Australia reports the views of players in the insurance industry in response to the Federal Government’s 2022-2023 budget. Major concerns include talent shortages, lack of support to make insurance more affordable and lack of climate resilience preparation.  

Continue reading “Federal Budget: The insurance industry reacts”

Startup execs and VCs on what they want from the federal Budget

MELBOURNE – 29 MARCH 2022– Now that the budget is out, startups are looking to the government to expedite policies that will address a range of economic issues they are facing. The tech startup community in Australia is booming and it’s crucial for many in this community to get support from government policies as they seek to accelerate their growth. 

Continue reading “Startup execs and VCs on what they want from the federal Budget”

Innovating for resilience: Are insurers taking it seriously?

MELBOURNE – 22 MARCH 2022– Kanopi’s virtual roundtable event ‘Innovating for resilience’ discusses the future of business resilience for insurers, where panelists describe an emerging movement that combines historical weather forecasts with machine learning models that look into the future. Are Australian insurers ready for this next step? 

Continue reading “Innovating for resilience: Are insurers taking it seriously?”

Is this the solution for unaffordable flood coverage?

MELBOURNE – 12 MARCH 2022– Kanopi CEO Nigel Fellowes-Freeman shares his opinion with Insurance Business Australia on the future of mitigating climate change risks and how technology might be the key to better preparation. 

Continue reading “Is this the solution for unaffordable flood coverage?”

Kanopi to host March roundtable

MELBOURNE – 7 FEBRUARY 2022– Kanopi announces an upcoming live virtual roundtable, Innovating for resilience, which will host a panel of industry experts who are set to explore the current and future challenges insurers will face and how to overcome them through digital transformation.

Continue reading “Kanopi to host March roundtable”

Digital transformation trends in insurance

Insurers tend to innovate slowly in an attempt to get things “right” in a heavily regulated industry. But that is changing. COVID and climate change have accelerated the digitalisation of the insurance industry, and there is no going back. The time to act fast is now.

Continue reading “Digital transformation trends in insurance”

How to improve speed to market: 5 tips insurers should know

Innovation rules the day when it comes to the insurance industry. In an increasingly unpredictable world, companies that adjust their product offerings to changes in the social, economic, and physical environment are most likely to remain relevant—and attract more customers.

Continue reading “How to improve speed to market: 5 tips insurers should know”

Is the insurance industry no longer a digital dinosaur?

MELBOURNE – 6 NOVEMBER 2021 – During the last few days, Australia passed significant COVID-19 milestones with implications for the insurance industry. The vaccination rate moved beyond 80%. Fully vaccinated Australians and permanent residents are allowed to travel to and from Australia. NSW and Victoria opened their borders to the fully vaccinated.

Continue reading “Is the insurance industry no longer a digital dinosaur?”

Insurance innovates despite COVID

MELBOURNE – 25 OCTOBER 2021 – Kanopi CEO and Founder Nigel Fellowes-Freeman says as other industries slow down and take a cautious approach, insurers are embracing technology and innovation and open insurance and other data-driven innovations will transform the sector from a “set-and-forget” product into a service that engages with the consumer and dynamically varies its premium depending on the need of the customer.

Continue reading “Insurance innovates despite COVID”

How to develop a data-driven business strategy

There is no guesswork in the world of business. A staggering 70% of businesses fail within 10 years due to lack of preparation, insufficient market demand or an inappropriate business model. There are areas in life where “winging it” is appropriate.

Continue reading “How to develop a data-driven business strategy”

Industry disruptors say brokers are needed

MELBOURNE – 17 SEPTEMBER 2021 – Those insurance industry disruptors known as insurtechs are more than happy to coexist with brokers. 

A decade ago, many brokers probably felt threatened by the first wave of insurtechs. These young firms with their advanced digitisation plans presented brokers with the prospect of losing many revenue streams. However, at a recent insurtech roundtable, current industry leaders said the future of brokers is assured.   

Continue reading “Industry disruptors say brokers are needed”

15 digital trends in the insurance industry

Over the past few years, the insurance technology sector has built serious momentum. New players are on the scene and they’ve attracted more funding to insurtech in 2021 than ever before. And it makes sense – changing customer behaviours and expectations mean the market is crying out for personalised insurance solutions.

Continue reading “15 digital trends in the insurance industry”

Why insurance tech is now one of the hottest startup sectors for investors

Seemingly out of nowhere, insurance tech is suddenly hot. Earlier this month, Honey, a home and contents insurance startup that few had heard of, made global headlines raising Australia’s largest ever seed round, coming in at around $15 million. That’s remarkable when you consider that most rounds in Australia are less than $1 million.

What could be seen to be more astonishing is that this happened during a period where the mainstream insurance industry is getting slammed. It is seemingly being plagued by annual fires, an unfortunately slew of once in a decade storms, and a once in a century pandemic, all of these major events are forcing insurers to pay out claims and increase premiums. 

Continue reading “Why insurance tech is now one of the hottest startup sectors for investors”

Expense Check raises AU$4M to drive global expansion and rebrands to Kanopi

MELBOURNE – 25 MAY 2021 – Expense Check, a data-driven Australian insurtech, today announces the close of an AU$4 million capital raise and its rebrand to Kanopi as it prepares to expand its local presence and launch into the US market.

Continue reading “Expense Check raises AU$4M to drive global expansion and rebrands to Kanopi”