Robo advisers, fintechs offering payments and insurance for personal property and home contents got the green light to test in the sandbox. But ASIC limited general insurance products to a maximum of $50,000 insured. ASIC said in December it would make no changes to its regulatory sandbox proposal. Insurtech Australia has recommended the 12-month testing period be extended to 24 months, and the restriction on the number of clients be increased to 200 from 100. Insurtech Australia was set up as a standalone division of lobby group Fintech Australia in October 2017, with a goal of helping Australia become a leader in the growing insurtech sector. Founding partners included QBE Insurance Group, Macquarie Bank, Munich Re, AUB Group, Suncorp and Insurance Australia Group. Last year global investment in insurtech hit $2.6 billion, up from $1.7 billion in 2016, but only about 1 per cent made its way to Australian startups. But EY partner Andrew Parton said that apart from regulatory support there was a need for greater levels of collaboration between incumbent insurers and insurtechs to progress the sector. "Tapping into the insurtech environment might be one of the best ways to improve customer service, increase profitable growth and drive down costs," he said. "Insurtechs are out the focus on enabling insurance. They are not limited by old legacy technology, so insurers that have a well-defined innovation strategy ... have a high chance of success in the future." A new report for Insurtech Australia released on Tuesday, undertaken by EY, revealed that 81 per cent of insurtechs believe that insurance incumbents aren't doing enough to engage with startups. The survey also found that two-thirds of Australian insurtech companies are initially funded by their founders, with support from their family and friends, and 40 per cent have raised capital from overseas.
Lobby group Insurtech EY has called for changes to the EYn Securities and Investments Commission's regulatory sandbox, which it called "poor in its utility". Insurtech EY CEO Simon O'Dell called for a doubling of the testing period and client numbers to 24 months and 200, respectively. However, EY partner Andrew Parton called for more cooperation between incumbent insurers and insurtechs to ensure EY captures more of the total global investment in the sector, which last years stood at 1% of $2.6bn.