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October 24 2016 | Mark Breading

tech startInsurTech Week 2016 hosted by the Global Insurance Accelerator in Des Moines has just come to a close. It was a great experience to be a mentor to startups and engage in the bootcamp environment. And it is quite interesting to see the energy, excitement, new ideas, and investment in the insurance industry. Brian Hemesath and his team at the GIA have done a great job of harnessing this activity and being a positive force for change in the industry. SMA has been actively involved in the whole InsurTech space, partnering with the Silicon Valley Insurance Accelerator (SVIA) and the GIA, participating in many InsurTech and emerging tech events, publishing research, and providing strategy advice to both insurers and tech companies. There are two themes I would like to highlight in this blog that are worthy of attention. The first is that the ingenuity and sheer variety of new startups is astounding – and will ultimately be a great thing for the industry. The second theme, and perhaps the more subtle one, is that there is a collegial atmosphere and a common sense of purpose about the role of insurance in society and business.

Variety and Ingenuity

The eleven InsurTech startups participating in this InsurTech week are a microcosm of the larger InsurTech movement. A few examples of the startups are illustrative.

  • Abaris – an innovative, direct-to-consumer solution for retirement planning, starting with income annuities.
  • Insure A Thing – an idea for a revolutionary new business model for insurance that includes making payments in arrears (post-claim).
  • Denim – a social media ad platform for insurance with a vision to ultimately reimagine marketing and distribution.
  • ViewSpection – a mobile app for DIY property inspections to help to inexpensively provide more information to agents and underwriters.

Other participants also had innovative solutions for various lines of business and addressed key business issues in insurance today. Those included Ask Kodiak, Gain Compliance, Montoux, InsureCrypt, Elagy, CoverScience, and Superior Informatics. Some of the eleven are in the early stages. Some originated outside North American and may or may not enter the market here. Some may not even be approved by regulators in their current form. But that is true of the broader set of the hundreds of InsurTech companies that are active today. The main point is that there is a great deal of innovation here and many of these companies will play a role in the evolution of insurance, one way or another.

Collegial Atmosphere

The founders and investors in InsurTech companies certainly desire to make money. Insurers that are engaging with these firms hope to gain competitive advantage. But in keeping with the culture of the insurance industry, there is also a great atmosphere of collaboration and even a sense that there is a higher purpose. I don’t want to sound too dramatic, but there is a sense of altruism here – a sense that there are great opportunities to make the world a better place. Many of the InsurTech companies see opportunities to improve safety in homes, in businesses, in factories, and on the roads. The potential to significantly reduce accidents and deaths is tangible. Providing new services and capabilities to enhance lifestyles, improving individual well-being, and just making it easier for customers to do business with the industry are also common purposes. There is a spirit of cooperation between insurers, InsurTech, and other industry players, even in cases where companies are competitors. Not to criticize other industries, but insurance is about a lot more than selling a widget and making a buck.   

A Bright Industry Future

Overall, I believe this is cause for optimism for the insurance industry. It is not easy to transform from today’s business models, processes, and systems into a future that embraces all the new ideas coming from InsurTech. But many in the industry are now actively involved in building strategies, experimenting with new ideas and technologies, launching new ventures, and generally being willing to think differently. While many industries are being disrupted, insurance is more likely to morph into a better version of itself, with incumbent players learning from and partnering with new players. 

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Mark Breading
Strategy Meets Action