5 Questions with Insurtech Influencers – Ed Halsey
We continue the series of interviewing insurtech influencers to find out their views on the most promising start-ups, obstacles to market disruption, impactful and attractive fields for funding, and much more. We have already published stories with Robin Kiera and Paolo Cuomo, and Rick Huckstep, so don’t forget to check out these!
Sharing his thoughts today, we have Ed Halsey, the Founder of Evermore Digital. Ed believes the real winners to be insurtechs offering hyper-focused product distribution and new ways of buying to highly marketable demographics of buyers. He predicts the low-code market to continue to explode and enable people to build intercommunicating ecosystems out of best-of-breed solutions. As he says, insurance is an industry with the potential to be great, and we mustn’t be afraid of taking risks – unicorns are born from those that have the courage and conviction to roll the dice. Keep reading to gain an insight into his interesting ideas.
Please name three of the most promising insurtech start-ups in 2021. Why exactly these?
I think the industry remains ripe for disruption, so businesses aiming to unsettle the status quo and reimagine the industry are the ones that truly excite me. As such, hubb’s unique approach to usage-based broking is a huge draw for me and I have been lucky enough to be involved in the early stages of that business. In any other industry, paying for the service you consume is entirely normal. It’s about time that in insurance, new ways are created in which customers can buy their commercial insurance.
2) Version 2.o of Flock
I’m cheating slightly on my second one (editor’s note: Paolo Cuomo referred to Flock in his interview) by pointing to what I see as version 2.0 of Flock. Whilst they have long been the golden boys of insurtech with a hyper-targeted drone offering, a longer-term expansion into motor always seems a logical step. Flock’s move into motor fleet is much welcomed, particularly using pre-existing technology that they have already proven elsewhere. They are a super smart team, dedicated to their mission. I’m excited to see what comes next.
Last but not least, how can I possibly look at the most promising insurtech start-ups of 2021 without mentioning our first insurtech unicorn, Zego?! Given the level of funding they have secured, how can you not be excited by the possibilities it creates for them as they, much like hubb, take a usage-based approach, specifically to commercial motor.
What is the biggest obstacle for insurance start-ups that holds back market disruption and meaningful change?
The biggest obstacle for start-ups, insurance or otherwise, is the spread of expertise that they need with such minimal funding. Early-stage founders need to wear many hats: be the Head of HR, Marketing, Sales, Brand, Operations, Governance, Technology, Insurance...the list is endless. Therefore, it’s vital that you are able to quickly build a team around you that can fill in your knowledge gaps, support your efforts, and who unequivocally believe in the mission. It’s not enough to just have a great idea – you need to be able to inspire others, prove, scale, and bring it all to life.
In terms of wider disruption and meaningful change, the biggest blocker is ourselves. We are trying to bring about change in the most naturally risk-averse industry in the world. In an industry that has it engrained at the very core to look at all the things that could go wrong and the impact it will have on the bottom lines. Unfortunately, the hardening of the market may have a negative impact, just as we were starting to see businesses forced into changes through an ever-softening market that could only be saved by improvements to technology and efficiency.
Change needs a compelling catalyst. If you’re a CEO making £500K a year, the value of your shares is increasing, and you’ll be stepping back within the next five years – do you really want things to change? It’s a little like the scene from “The Office” where Tim talks about having rolled a dice. The CEO has currently rolled a 4. Sure, he could get a 5 or 6, but he also risks a 1, 2, or 3. “Better to play it safe,” he likely concludes. Though, unicorns are born from those that have the courage and conviction to roll the dice. Moreover, they recognise that thinking of it as a dice implies luck, but actually, the number they roll is entirely within their control. Without the CEO’s willing to roll from a 4, we wouldn’t have Google, Apple, Tesla, Aliexpress or Amazon. I think that insurance is an industry with the potential to be great, but it has never truly reached for the brass ring, worrying more about numbers and too little about buyer behaviours.
If you were to establish your own insurance start-up, which problem would you solve, and why?
The answer here is simple; we need to solve our collective reputation as an industry and rebuild buyers’ faith. Right now, customers do not see the value of either the product we sell or the service they receive, and, therefore, it remains a “grudge purchase”. We need to win back the trust of buyers by demonstrating what we are doing on their behalf and how they can benefit. To do so, we need to take a long, hard look at some of the practice that goes on and hold ourselves collectively accountable for ensuring that customers get the best product for their very specific and up-to-date needs at a price that is reflective of true and demonstrable value.
Which insurtech field will be the most impactful and attract funding in 2021?
Still, the most expensive part of an insurance business is the staff. I expect to see more investments into areas that enable the reduction of laborious tasks and encourage staff back to high-value activity. Be it AI, machine learning or intelligent automation that saves the day, there is a terrible amount of inefficiency and wastage that remains within insurance business. Low-code will continue to explode and enable people to build intercommunicating ecosystems out of best-of-breed solutions.
The real winners will be those offering hyper-focused product distribution to highly marketable demographics of buyers. If they can offer a “new way to buy”, they get double points – just look at how Lemonade has managed to create a buzz around its product for inspiration. Alternatively, take a look closer to home at the incredible work done by Bought By Many who has clearly concentrated on a world-class buying journey and best-in-show policy coverage. The reality is, many will try and fail, but those that succeed in getting their careful balance of marketing, distribution, and technology right, will tap into behemothic markets that are ripe for change and desperate for new products, ways of buying, and trusted advice.
The future of insurance: what makes you hopeful, what worries you?
What makes me hopeful is the level of investment into insurtech right now. People recognise the value, and it is now down to us as an industry to deliver. Though, what perhaps makes me nervous, is that COVID-19 has forced so many industries to revisit how they do things. Has insurance done the same or have we buried our heads in the sand and used COVID as an excuse to play it even safer? Time will tell.
Ed is the Founder of Evermore Digital – a consultancy firm that helps insurance buyers buy and sellers sell technology more effectively.