Insurtech Starts With ‘I’ but Needs ‘We’

There is one answer that keeps coming up to the question of "What makes an insurtech initiative a success?" That answer – the team.

Throughout a number of the recent conferences I have attended and conversations I have had with my clients, colleagues and incumbents in the space, the question of "what makes an insurtech/innovation initiative a success?" keeps coming up. This week, I explore the critical success factor. If you haven’t figured out by now through my writing, I like the softer side of our business. A lot. Perhaps it is the salesman in me and the fact that I have always been more relationship-focused than details-focused. In my most recent management roles, I always tried to delegate the detail-oriented tasks to the people on my team who were good at it, and have them provide me a summary of their findings so I could go manage the relationship/conversation with our various stakeholders. When looking at insurtech solutions, I tend to focus on customer outcomes more than the actual tech behind it. Yes, the tech is cool and interesting for me. The application of it is even more impressive. I’ve explored this concept a few times – herehere and here. This week, I’m going to take a slightly different look. That’s because there is one answer that keeps coming up to the question of "What makes an insurtech initiative a success?’, regardless of if I speak to incumbents, investors, startups/technology providers or consultants. That answer – the team. The team is what is ultimately going to make an insurtech initiative a success. There are some key factors that should be common, regardless of where you sit. In addition, there may be specific nuances to take a look at depending on what role you play in the initiative being undertaken. This week, I take a look at the common factors that should be in place, the different perspectives one may look at, as well as a revised formula for my "insurtech formula for success." See also: An Insurtech Reality Check   What are the common factors one should look at when partnering? To set the stage for what’s to follow, I would like you all to imagine the different types of partnering that can be out there for any insurtech initiative (for initiative, I mean an implementation, investment or building of a company). I will name a few (though this is not an exhaustive list):
  • Incumbents (reinsurers, carriers, brokers, agencies, etc) partnering with startups/technology providers
  • Startups/technology providers getting funding from investors (on the flip side, investors investing in a startup)
  • Technology providers partnering with each other to offer a more robust solution to incumbents
  • Consultants being used by incumbents, investors and technology providers to help implement, assess or "strategize"
Regardless of the type of partnership, there are a few key factors that should exist if you are going to partner with another party for an insurtech initiative.
  1. Knowledge – Does this person/company have the knowledge to understand what pain point they are trying to tackle? Do they have knowledge of the industry? Etc.
  2. Trust – Do I actually trust this person/company? I recently read this article from Inc., which outlined Google’s study on trust and how to demonstrate it. It’s quite fascinating, and I encourage you to have a read.
  3. Likeability – Do I like this person/company? Even if I don’t necessarily like them, am I going to be able to tolerate them for the years to come? Many partnerships are long(ish)-term. If you don’t like someone that you are going to have to work with for a while, that could pose a big problem down the road.
These three factors, knowledge, trust and likeability, form the foundation for the types of relationships that I will describe below and must be inherent if you are to partner with someone (regardless of where you sit). What the factors are to look for, depending on where you sit Now that we’ve established a foundation, let’s look at the different types of relationships from a startup/technology vendor, incumbent and investor perspective. Startup/technology providers The three relationships I will look at here are; their incumbent partners (primarily for B2B), their team and their investors. The types of questions they should be asking for each of these parties are:
  • For their incumbent partners (some of this is covered in the insurtech startup guide):
    1. What is their approach to innovation?
    2. How much has management bought into it? Are there KPIs assigned to initiatives, and what are they?
    3. Do they have a dedicated budget, resource, need and timeline for the proposed initiative?
    4. What other initiatives have they done, and who have they partnered with?
    5. How do they treat the startup/technology provider (does it feel as if they are a partner or just another vendor)?
  • For their team:
    1. Do they have the right mindset to work in a startup (in the case of an early-stage company)?
    2. How flexible are they in working style?
    3. How do they handle pressure?
    4. What are their expectations?
    5. Do they want to build/grow something, or are they OK with the status quo?
  • For their investors:
    1. How much control (other than just % of equity) is the investor going to want after the investment is made?
    2. How much is the investor willing to mentor/coach them?
    3. What resources will they put in place to help grow their business, while still letting them (the founders) run it?
Incumbents Using the term "incumbents," I mean any reinsurer, carrier, MGA, broker, etc. that may be looking to partner with an insurtech startup/technology provider. The two relationships I will cover here are; their technology partners and their internal teams. The types of questions they should be asking for each of these parties are:
  • For their insurtech startup/technology providers (some of this is covered in the carrier guide):
    1. How much do they understand the insurance industry/specific line of business(es) we operate in?
    2. How much do they understand our specific company and nuances? (Incumbents – while it is nice that they do their research beforehand about you, you also need to bring them on this journey of understanding if you really want them to help)
    3. What has been their current experience with other partners? Not just from an ROI perspective, but also an implementation perspective.
    4. How patient are they to work within the confines of corporate governance?
    5. What is their approach to security and handling data?
  • For their internal teams running an innovation initiative:
    1. For the person/team that is leading an initiative, do they have the right balance of understanding of governance plus the agility/flexibility to push an agenda that starts with change?
    2. Is this person/team going to seek to overcome internal pushback or see it as a wall that cannot be scaled?
    3. Is this person/team going to have the leadership ability (and swagger) to be the voice of change for our organization?
Investors I haven’t worked for an investment firm yet, so, it would be difficult for me to assess what sort of internal requirements they should have in place for their teams. I will only take a look at the types of questions they should be asking for the companies they invest in. These are similar to the questions above that incumbents should be asking to their insurtech startup/technology partners.
  1. How much do they understand the insurance industry/specific line of business(es) they operate in?
  2. How open are they to ceding some ownership of their company?
  3. How coachable are they? Are they willing to have changes made/suggested to their business model, or do they feel like they know it all and are not willing to change?
  4. How diverse is their team (from a variety of perspectives)?
  5. How have they come up with their solution?
  6. What sort of drive to they have, and how have they handled adversity?
I’m sure for all three of these parties, there are more questions to ask. What questions do you think of (depending on where you sit)?  Please comment below, I’m interested to hear! See also: 10 Trends at Heart of Insurtech Revolution   With all this, the "insurtech formula for success" needs an update Back in early May, I posted the insurtech formula for success as: Insurtech Success = customer experience + dollars and cents + compliance + applicable technology Whereas:
  • Customer experience = what part of the customer experience are you trying to make better? Is it quoting/purchasing? Is it claims? Is it servicing? ("Customer" may not always mean policyholder. "Customer" may also mean the employees or partners -- like auto body shops -- that are part of the value chain. Think about which customer you are trying to solve a pain point for.)
  • Dollars and cents = Does the solution help to increase sales or reduce costs? Our industry is a business, and that means we get measured by dollars and cents. Ultimately, a solution that is being put in place should do one of these things – increase sales or reduce costs.
  • Compliance = is the solution in line with regulation? Is it compliant with existing internal guidelines? Is it fair to customers? Is it secure?
  • Applicable technology = what is the right technology that should be used to meet this need? This should be the easiest part of the equation once the other three are determined.
This week, I’m making a slight change to the formula, which has also been reflected in the original article. Insurtech Success = (customer experience + dollars and cents + compliance + applicable technology)^team I love the circumflex/hat symbol (^) so much in this formula. It fits so aptly here. For those not as familiar, it literally reads out as "to the power of." Customer experience, dollars and cents, compliance and applicable technology are extremely important. They will only succeed by the power of the team that is driving it. Because after all, it’s not "you" nor "I," it’s "we" and "us’". You can find the article originally published here.

Stephen Goldstein

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Stephen Goldstein

Stephen Goldstein is a global insurance executive with more than 10 years of experience in insurance and financial services across the U.S., European and Asian markets in various roles including distribution, operations, audit, market entry and corporate strategy.


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