- Don’t fear change: While insurtech innovators need to understand the complex regulatory environment and the culture of the insurance industry, I also think that traditional insurers could learn a little from the newcomers. Silicon Valley startups, for instance, are at the forefront of cutting-edge technology. Consider the tremendous consumer backing that a company like Apple has, and you realize that these techy new entrants have tremendous insight into what makes the customer tick. Adopting a little of this can take insurers a long way in the customer-centric era, so don’t be afraid of a little give and take when it comes to merging your culture with an innovator’s.
- Have a plan: Some insurtech innovators are eager to enter the industry and will promise you the moon and stars, but do you really need the whole universe of what they are offering? For instance, most insurers have a strong agent channel, and their customers like working through agents. One insurtech may promise superior results by eliminating agents in favor of a straight D2C play. As we’re seeing with many new insurtech disruptors, consumers want to interact through a variety of channels, so you would be better served by digital capabilities that can support both D2C and agent channels.
- Avoid the culture clash: I’ve worked in both the technology industry and the insurance industry, so I understand the culture shock that can occur between the two types of organizations. Earlier this year, we attended the Auto Insurance Report National Conference (AIRNC) 2017, where Patrick Sullivan spoke about the wave of insurtech entrants. Based on his experience speaking with many of them, he concluded that the movement won’t change the world, but niches abound. What this means is that disruptors won’t be able to unseat existing insurers, but innovators with a strong insurance background can merge their technological skills with this knowledge to help insurers navigate the changing environment. The key is to find partners with strong industry experience.
- Support innovation: The insurance industry is well-known for being resistant to change, so it’s important that a spirit of innovation comes from the top down and that leaders support the progressive steps you’ll be taking with an innovator. For instance, at Bolt, we're always asked by companies that sell products on our platform why they should want to bundle in products from others in our network. We've seen companies greatly increase their results by doing so, because they show the customer they are committed to all of his or her needs. But making the commitment to bundle with competitors wouldn’t have been possible without an organization-wide commitment to change.
- Dedicated resources: Regardless of the change initiative underway, partners can only take you so far. Internal change management is the responsibility of the insurer, and you need to make certain you have a plan, and the dedicated resources, in place to support the new initiative. Over the last few years, we’ve worked with a major insurer on expanding product selection and giving agents access to top digital tools that streamlined the buying process. The company instituted internal ambassadors that led the change and supported agents throughout the transition, ensuring the success of the launch and beyond. The result was a $26 million increase in premiums over two years.
5 Things to Know on Insurtech Partners
Don't view change as black and white. For instance, a digital mix including agent channels outperforms a strictly D2C approach.