2022 Resolutions to Foster Innovation

Here are our top wishes for 2022 that will alleviate barriers to innovation and adoption and foster breakthroughs.


It’s that time once again when predictions about the insurance industry’s outlook for 2022 come rolling in like waves. They are interesting to those of us in the industry and may provoke discussion and healthy debate or even serve as a call to action for others, even though most predictions turn out to be incorrect or poorly timed. As Bill Gates famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.”

Just take an objective look at the early 2020 predictions, which said little to nothing about the prospects of a multi-year global pandemic, not to mention the acceleration of certain technologies and derailing of others. Granted, this is an extreme example, but it illustrates the point. Predictions about the rate of M&A activity and adoption of technology seem to be generally accurate about “if” they might happen but mostly inaccurate as to the “when” they will happen.

Rather than add a prediction to the fray of what might happen, let’s concentrate on something that many in the insurance and insurtech space would like to see happen, framed as New Year’s resolutions for 2022. Let's focus on removing barriers to innovation.

The insurtech movement is somewhere between seven and nine years in play and certainly gaining no matter the standard of measurement: Global investment sums, sheer numbers of startup launches and the level of M&A and SPAC activity are all at record levels. During this period, there has been a loud and growing chorus of discord between the cadence of new ideas, concepts and technology and the contrast of that with protracted insurer adoption cycles. To make matters worse, the number of startups focused on identical or similar solutions is far greater than the number of insurers with sufficient bandwidth to evaluate or pilot all of them. As one industry pundit recently shared with us, “There are just too many dogs chasing the same bone.”

This is not a statement of blame, instead a commonly shared observation from all participants: insurers, startups, investors, established solution providers, analysts and thought leaders. 

Does anyone working in the P&C insurance ecosystem really believe the speed of insurtech adoption is acceptable? In fact, you could go so far to say the current rate of adoption is actually a threat to the insurtech movement itself. Either way, the speed of insurtech solution adoption will be a critical factor in industry progress in 2022 and beyond.

What startups say

Startups are often surprised about the number and complexity of barriers in the insurance space. While it is well understood that the industry is mature, highly regulated and dominated by many very large companies, most startups are dismayed by the number of decision makers and the time it takes to do just about everything: scheduling meetings, signing non-disclosure agreements, reaching terms to start a pilot, etc. Long sales cycles are a familiar and widely accepted obstacle when trying to partner or simply demo one’s solution.  

Upwards of a year or longer from introduction to pilot phase is common and, in some circles, considered fast. Ironically, startups may find an insurer’s information security protocols, no matter how onerous, a welcome step because the prior steps were truly difficult. The infosec stage is also a step closer to pilot or implementation, so no doubt a relief once reached.

To avoid barriers, some startups have opted for a managing general agency (MGA) model to deploy their technology somewhat more directly, but this approach leaves out the majority of insurtechs, which work within existing insurance models. Partnering with other solution providers can help accelerate things, but here again there are complications. Finally, while startups often begin prospecting with the largest carriers, they find that the larger a company is the harder it is to do business with. (On a positive note, startups that do overcome these barriers tend to realize long-lasting, successful relationships with insurers.) 

See also: Insurtech Trends for 2022

What insurers say

Insurance carriers believe they are misunderstood in some areas while generally agreeing about the criticism directed toward them. They’ve also bought into the realization that disruption is part of the future of insurance and have thus made their own insurtech investments, stood up innovation teams, sponsored accelerators and competitions and much more. 

Insurers are quick to point out a bevy of legal, regulatory and privacy exposures that may be overlooked by startups. But there is a realization of the need for innovation and true admiration for the unobstructed thinking that allows startups to be nimble.  

Carriers also cite real world factors such as the need to upgrade or even transform legacy systems, while moving many operations to the cloud. Insurers also say they are moving at an unprecedented tempo and are trying all sorts of new concepts, with lots of evidence of newly announced partnerships, investments and deployments. Money and resource constraints are real and restrict the number of new endeavors.  

What they both say

When you carefully consider the startup and incumbent vantage points, there is a high degree of empathy and understanding for each. They want to help each other and realize their success depends on working together early and often. 

COVID-19 derailed many plans, accelerated others through necessity and channeled focus toward business continuity and later to hybrid workforces. This is a major issue for large companies no matter how much of a game face companies project.

Overcoming barriers in 2022: platforms and ecosystems

The insurance business process is highly complex and involves hundreds of potential interactions internally and externally, including connections with thousands of ecosystem participants. Until now, this has been a major barrier to process efficiency,

The emergence of insurance industry platforms, also called marketplaces, represents an important cure for this complexity that can facilitate commerce among insurers, insurtechs, supply chain participants and policyholders. For both insurers and insurtechs, integrations are reduced from many to few or even to one. For policyholders, customer experience is improved. For all participants, costs and time to market are reduced, and access to more and different trading partners is significantly expanded. The ability for insurers to test and engage with innovative startup solutions is considerably simpler, faster and less risky. 

See also: Building a Digital Field of Dreams

Where do we go from here?

In the spirit of making New Year’s resolutions we would like to see for 2022 that will alleviate innovation and adoption barriers, here are our top wishes – a mix of practical, incremental and bigger breakthroughs:

  • once an insurer and startup begin discussing the NDA process, it will be completed in one week or less
  • startups will know and anticipate their prospective insurance carrier’s audience much better and will dial into problems, pain points and priorities 
  • insurers will identify and share their problems, pain points and priorities more clearly and will also distinguish among what’s desirable today, tomorrow and in the future
  • insurers will find ways to take more risk and create more sandbox areas to pilot, sort of an innovation lab 2.0 with real funding and authority
  • startup offerings will become more categorized by type to make awareness, comparison and contrasting possible
  • startup vaporware will be eliminated or reduced to more immediate, tangible solutions vs. future road map ideas
  • when insurers are not interested, they will say so as soon as they know it and offer any constructive feedback
  • intermediaries and those well-positioned to help move the needle will be more involved, from scouting to solution alignment 

This last wish for 2022 is extremely relevant to us, because we are one such intermediary and leverage our deep subject matter expertise and extensive relationships across the ecosystem to assist market participants, including insurers, insurtechs, supply chain partners and investors, to execute on their strategic objectives.

We want to wish you all a very successful 2022.

Stephen Applebaum

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Stephen Applebaum

Stephen Applebaum, managing partner, Insurance Solutions Group, is a subject matter expert and thought leader providing consulting, advisory, research and strategic M&A services to participants across the entire North American property/casualty insurance ecosystem.


Alan Demers

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Alan Demers

Alan Demers is founder of InsurTech Consulting, with 30 years of P&C insurance claims experience, providing consultative services focused on innovating claims.


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