Celent has released a new report titled Insurer-Startup Partnerships: How to Maximize Insurtech Investments. The report was written by Mike Fitzgerald, senior analyst in Celent’s North America Property/Casualty Insurance practice.

Insurers are making unprecedented investments in startup technology firms. Incumbent firms and industry newcomers increasingly operate within new partnership arrangements that go beyond the traditional supplier-buyer relationship. The success of these partnerships will directly impact the returns from these investments. Thus, it is important to understand what makes such relationships work most effectively.

In order to analyze this emerging business model, Celent surveyed 62 insurers and 35 insurance-focused startups in Q42015. The research sought to explore the following questions:

1. What different types of partnership models are being used?
2. What are the key success factors for such partnerships?
3. What are key challenge areas?

“Success will come to firms which are able to make the necessary adjustments to their own preferences, cultures, and working models to create meaningful partnerships,” said Fitzgerald. “The predominant approach will be one in which startups coexist with insurers, not replace them.”