During the last few months, we’ve had the honour to interview the most amazing insurtech influencers around the world. If you missed out on some of these great stories, don’t forget to check them out: Ed Halsey, Jan Kastory, Paolo Cuomo, Rick Huckstep, Robin Kiera, Roger Peverelli, Sabine VanderLinden, Spiros Margaris, Steve Tunstall.
This is the first recap of these interviews. We start with topics like the most promising insurtech start-ups, which problem would influencers solve by establishing their own insurance start-up, and what are their opinions on the future of insurance.
Please name three of the most promising insurtech start-ups in 2021. Why exactly these?
The influencers we interviewed outlined many great start-ups who could make a notable impact this year. The list was long, but they predicted success to players bringing digital platforms, automation, AI-based solutions, and technology into the picture to simplify data structuring and augment the work of insurance professionals. For example, Riskwolf, Ritablock, Shift Technology, Doorda, Layr, Ki insurance, as well as Wefox, Zego, Zelros, Qover, and Weecover on the distribution tech side.
Many influencers mentioned Lemonade that is operating in a league of its own. It has disrupted insurance business and stands out by its redesigned and vertically integrated business model that genuinely differs from the traditional. Wefox was also referred to several times for its unprecedented success in disrupting retail distribution.
In addition, the healthtech space was emphasised, represented by disruptive players like Oscar, Bright HealthCare, Alan, and Clover Health. Innovative mobility and motor insurance start-ups like Zego, Metromile, Laka, and Flock were also brought into the limelight.
Attention was drawn to insurtech start-ups that address the underinsured and underserved market segments in different corners of the world, for example, Bought by Many, Hokodo, Sugar, Hadiel, and Pula. The sector of corporate insurance was noted as promising, exemplified by Next Insurance.
If you were to establish your own insurance start-up, which problem would you solve and why?
Asking the influencers, which problem they would solve by establishing their own start-up, we got a lot of exciting answers. Maybe some of these ideas are the next unicorns.
First of all, a suggestion for all founders was to focus on one problem at a time – narrow the problem definition which concentrates on one major industry challenge within a specific market. This is always more effective than going for multifaceted issues.
Attention was drawn to underserved and underinsured segments. While traditional insurance products have failed to meet the needs of the poorest and most disadvantaged people, someone needs to make insurance fair, affordable, and accessible to everyone around the globe. A central issue is that we need to find appropriate levels of insurance. For example, the goal should be to protect SMEs against different risks, make businesses realise the value in insuring and help them as a genuine outcome of selling insurance.
As the insurance industry has challenges to solve post-crisis such as recognising the importance of sustainability and inclusive finance, we need to appreciate underserved market segments, transition risk, and ethical technology deployment.
The future insurtech will also have to deploy very sophisticated AI algorithms, IoT, and much personal data, and deploy it in the most ethical and transparent way possible. This way we can provide consumers with the insurance coverage they don’t even know they need, but eventually will. Think of all the new data streams, of all that AI has to offer. It provides entirely new added value from optimising the cost of ownership of a car to supporting a healthy lifestyle to prevent all sorts of health issues, etc.
There’s also a strong need to find a better way of mapping data sets to each other. A long-term bet would be to realise how we could get feeds directly from company systems to help understand their assets, so we wouldn’t spend time on rekeying data. Insurance professionals need a platform to augment underwriters and manage exception processing in complex commercial lines risks.
The future of insurance: what makes you hopeful, what worries you?
Speaking of the future of insurance, we are delighted to say that the influencers we interviewed were optimistic.
The future of insurance is looking bright – the changes in customer behavior, the new digital mindset, all the new data streams and advanced technologies, and the significant funding available for insurtechs. If start-ups keep up their speed of innovation and execution, the future is as bright as it gets. Innovation makes insurance cheaper for customers, while they receive better service. Risk is becoming more predictable and preventive, which is healthy for all parties. In fact, the insurtechs that disrupt the insurance industry show us that the disruption is real and a true threat to the incumbents.
There is a great future for insurance as technology is applied to streamline operations and adapt the industry to the new normal. The one-size-fits-all, fixed-term, restricted small print insurance product will not cut it anymore. The pandemic exposed poor customer experiences and engagements and forced poor performers to re-evaluate their approaches, partnerships, and technology choices. Insurers have learnt from the complex situation and many are now understanding the value of digital transformation.
The level of investment into insurtech right now is remarkable which shows that people recognise the value in insurance. As an industry, we should be excited and proud that much of our innovation is beyond simple convenience and making a meaningful difference to people, like the ability to offer previously uninsurable covers. There is also tremendous potential for the industry to leverage new real-time data sources to collaborate with customers for reducing risks. There are plenty of new, emerging risks that will enable continued premium growth.
Some pain points were also mentioned. As the pandemic has forced many industries to revisit how they do things, has insurance done the same? There’s a possibility that we don’t make the most of the enforced changes and a real risk of losing the steps taken on data and digital, post-pandemic. We mustn’t forget to treat the insurance and start-up community as a single incredibly powerful ecosystem.
Another issue pointed out was that the insurance industry is based on an intermediary model, which affects customer relationships. The danger lies in outsourcing branding to others, since a significant number of intermediaries sell insurance for the wrong reasons. Eventually, it will have a negative impact on the customers. As big tech companies move into the insurance sector, they bring their own customer relationships. This is a concern for intermediaries, because companies who own the relationships will overpower.
Stay tuned for the second part of the recap!
