InsurTech is a hot topic among the wider insurance community these days and with a great many fresh ideas circulating the space in social media we think it’s only decent that these ideas get shared.
As with every subject, InsurTech has cultivated its own thought leaders and we are publishing series of short interviews called “6 Questions with InsurTech Influencer“.
If you’ve been keenly watching the InsurTech space it’s likely that you know these people already, but if not keep watching this space and make sure to follow our interviewees on their Social Media accounts.
Without further ado, it is our great pleasure to continue this series of Q-s & A-s with Paolo Cuomo – co-founder of InsurTech London and thought leader within the global InsurTech community.
1. Please name 3 most promising InsurTech startups, feel free to add your comments why.
Focusing on specific start-ups is always tricky as their fortunes can ebb and flow so easily in their first few years. Understanding the exciting areas that start-ups are playing in is often more relevant. The robo-broking space where companies such as Brolly, Spixii, Surely Group are creating will undoubtedly create some real winners with the interesting question of whether any start-up can get to scale before incumbents create their own offerings.
On the personal lines side we see smart attention being paid to how social media data may allow focused coverage as Admiral tried to do recently and companies such as Digital Fineprint are pushing. On the ‘bigger data’ side, companies such The Floow, Cytora, Climate Corporation are gathering large amounts of data from a range of sources which is allowing underwriting to be done in a more sophisticated manner.
2. What is the biggest obstacle on the way of insurance startups to disrupt the market?
The biggest obstacle for start ups trying to disrupt is the attitude of wanting to disrupt. While the discussions in 2015 were all about how the start-ups would disrupt the incumbents, 2016 and the start of 2017 have clearly shown there are partnership opportunities with good, innovative ideas coming from all sides, and even more where incumbents and start-ups are working together. The smarter start-ups see their role is working with other players (including the incumbents) to collectively disrupt the value chain for the benefit of everyone involved.
3. Are you betting more on the innovation from insurance companies or from startups, why?
There is ample space for both to grow. Insurers with good insight of their customers clearly need to continue innovating to compete against their traditional competitors and other new types of competitors. The incumbents should have the best view of what people really need. At the same time, start-ups can create whole new innovative proposition in analytics, channels to market etc unencumbered by the constraints of being large incumbent businesses. Watching the growth of start-ups in the context of insurance-supported incubators is interesting.
4. If you were to establish your own insurance startup what problem would you like to solve with that?
Much as shiny new front-ends might be the most glamorous way to go, my personal preference would be towards finding ways to better use data to select and price risks. I would look to the near infinite volumes of data in the world that are not considered when reviewing risks and see how these could be better used – not just in terms of traditional annual policies but in terms of constantly reviewed and revised cover and pricing. Now, there are already plenty of people aiming to do that, so this is not a unique idea but if done smartly it will have profound effects on the market.
5. What is your biggest concern regarding the future of insurance?
One of the biggest frustrations consumers and business have with insurance is the number of risks that are simply not covered. It would be unfortunate if all the innovative effort was focused on different ways of underwriting the current range of risks and as a result not significantly increasing the types of cover that could help individuals and executives sleep more comfortably at night.
6. What will disrupt the insurance sector in 2017?
2017 may well be the year that machine learning/artificial intelligence becomes the norm across a lot of areas of insurance. Many companies have done research and pilots in these areas in 2016 and some of this will start to enter how we work over the coming months. A lot will remain behind the scenes: for example triaging of emails to service centres and spotting potentially fraudulent claims; while some will be more on the front line with AI-driven pricing models beginning to be considered by underwriters and actuaries, and first assessment of claims that can be photographed (e.g, minor motor vehicle damage) being done by computer. AI for the next few years will remain a tool to support human decision makers so we are unlikely to see a sudden discontinuity in the short or medium term.
Paolo Cuomo is co-founder of InsurTech London. Paolo was formerly a McKinsey consultant and has been a vocal promoter of the smart use of technology innovation during his roles heading up change at Beazley, Chief Operating Officer at Charles Taylor Managing Agency and now Principal at Boston Consulting Group. He has been an ever present in the top 10 of the Power 100 List of InsurTech Influencers.
Follow Paolo on Twitter @pgc_at_work.
Read also other posts from series “6 Questions with InsurTech Influencer“.