June 27, 2017
Insurtech Is an Epic Climb: Can You Do It?
by Bret Stone
Insurtech is like the Tour de France. What’s good enough for now will likely be the equivalent of a 40-pound bike in five years.
“If you try to win, you might lose, but if you don’t try to win, you lose for sure!” —Jens Voigt, cyclist
Alpe d’Huez is a legendary climb, world-renowned by cyclists. A relentless 8.5 miles with 21 hairpin bends and an 8.1% gradient, it’s been a stage that can make or break the Tour de France for riders and determine the outcome of the entire race. What Alpe d’Huez is for cyclists, insurtech is for insurers.
Right now, insurers are faced with an epic climb: insurtech. A new breed of insurance technology has changed the game and disrupted an industry that’s been largely status quo. A very large bump (actually, more like a mountain) has appeared in the road — making it more critical than ever to “see over the horizon,” according to Jon Bidwell, former Chubb chief innovation officer and now SVP and underwriting transformation leader at QBE North America. However, to see beyond the horizon, you first must climb to the top.
“When we look back at today, the winners and losers will be defined by those that did and did not embrace an insurtech digital implementation strategy.” —Insurance Thought Leadership, “Death of Core Systems.”
The only way to compete is with technology that evens the playing field.
Over the past 110-plus years, the Tour de France has gone from 40-pound, fixed-gear road bikes (and no helmets!), to sub-15-pound, carbon bikes and electronic drive trains. Innovation, technology and engineering have played a role in the evolution of the sport of cycling. Think about it: If the 22 teams that compete in the Tour didn’t progress with some equality in the equipment they employ, there would be a very large gap on the field. It would be abundantly clear who’s still pedaling 40-pound bikes up Alpe d’Huez.
Insurtech is a game changer. What worked in the past will not work in the future. Insurance technology and innovation is undoubtedly moving at race pace. And, what’s “good enough” for now will likely be a 40-pound bike in five years.
See also: Why AI Will Transform Insurance
From the Internet of Things (IOT) to vehicle telematics and, especially, advanced data and analytics — which is fast becoming a key competitive differentiator — insurtech presents the opportunity to evolve and compete.
But if we don’t get on the bike and climb, there’s no possibility of winning, no possibility of moving the industry forward. With the right partner, or, in true Tour de France fashion, “domestique,” insurers can create a slipstream that accelerates the insurtech climb.
It won’t be long before we start seeing players screaming down the backside — trying to catch the next horizon.