Insurtechs are now focused on “collaboration instead of attacking,” though lofty valuations and easy funding may result in a trend toward “reverse takeovers” of insurance market incumbents by newer entrants, experts at McKinsey say.

McKinsey predicts upwards of $US9 billion ($12.39 billion) of insurtech funding this year.

“I would expect a trend of insurtechs acquiring incumbents, given the lofty valuations and the access to capital that insurtechs increasingly have,” Singapore-based Partner Alex Kimura said in the latest episode of the “McKinsey on Insurance” podcast.

The series discusses the trends, disruptions and strategies that are reshaping the insurance industry.

In Asia, Mr Kimura says a lot of incumbents are “really learning and partnering” in order to access new customer and market segments, and to develop new capabilities they couldn’t create otherwise.

Frankfurt-based Partner Simon Kaesler says many insurtechs are refocusing towards collaboration and B2B (business to business) instead of B2C (business to consumer).

“About five years ago, many insurtechs in Europe focused on attacking incumbents. I think this has really changed. We estimate that about two-thirds of all insurtechs are now focusing on collaboration instead of attacking,” Mr Kaesler said.

Boston-based Senior Partner Tanguy Catlin says both incumbents and insurtechs want to remove customer “pain points” and protect or capture those profit pools, and that has led to a lot more collaboration between insurtechs and carriers.

“Those with capital will probably try to integrate, whether it is carriers acquiring insurtechs or high valuations enabling reverse acquisitions,” he said.

The podcast said there has been a shift from front end to back end after the first insurtechs focused very much on disrupting the customer interface and found it difficult.

“Customers are very sticky; they don’t trust new brands. Insurtechs are now focusing more on the back end – on claims, on policy admin, on pricing analytics, and so on. The same is true for life and health insurance,” Mr Catlin said.

Listen to the podcast or read a transcript here.