Tag Archives: bold penguin

A Glimpse of the Future of Insurtech

Today’s announcement that Bold Penguin is acquiring RiskGenius marks a milestone in the maturation of the insurtech movement. I’ve known Chris Cheatham, the co-founder and CEO of RiskGenius, for years and have closely followed the developments of what I have often described as my favorite insurtech. So, under embargo, I chatted with Chris to ask him to summarize how he surfed the first wave of insurtech so successfully and where he sees the movement going from here.

The deal feels to me like maturity because it exemplifies how insurtech has moved past some early ideas (e.g., that a Big Tech company like Amazon or Google would invade insurance and lay waste) and some early models (such as peer-to-peer provision of insurance coverage) that have yet to pan out. Instead, the Bold Penguin acquisition of RiskGenius exemplifies what I suspect will be the dominant model for some time: one where a company acquires a smaller firm for a particular skill or technology and incorporates it into the acquirer’s products and services.

I realize that Bold Penguin is itself only four years old — I wouldn’t be surprised to see it eventually acquired by an even bigger company — but it already had some heft, having raised over $50 million, and has added RiskGenius’ 24 employees and $13 million of capital.

As Chris explains the fit, “Bold Penguin focused on delivering commercial insurance faster, getting the insurance bound and issued faster. We help people analyze insurance coverage faster.”

Bold Penguin provides an online exchange where brokers can request quotes for clients, which tend to be small and medium-sized businesses seeking nonstandard coverage. The exchange automatically matches those requests with carriers that might be interested in providing coverage, solicits quotes and feeds offers back to the broker and its clients. The process still requires manual underwriting, so it’s not like you hit “Done” and instantly get your car insurance quote, but going from start to finish generally takes days, not weeks, as can happen with completely traditional processes.

RiskGenius fits in because it uses artificial intelligence to analyze policies, down to the level of individual clauses. Want to know how cyber coverage compares across policies? RiskGenius can find the relevant language for you, arranged for easy comparison. Want to see at renewal time how an insurer’s policy has changed? RiskGenius can help you sort that out, too.

While Chris built a successful stand-alone business (out of that well-known insurtech hot spot Kansas City, Mo.), it seems to me that RiskGenius nests better inside Bold Penguin. Brokers using the Bold Penguin platform will not only get quotes from insurers but will now have a tool they can use to sort through the details of policies and to help customers understand those policies.

Bold Penguin’s acquisition of a feature/technology for its platform very much fits the model in Silicon Valley, where some startups don’t even try to build a full business. Why bother to build a marketing or legal operation when the acquirer only cares about the technology and would surely shed all the operations people anyway? So, I expect to see more narrow-bore deals like the takeover of RiskGenius.

“If you think about commercial insurance,” Chris said, “there are just so many complexities. An innovator should just focus on one thing to fix.”

He said he thinks the first wave of insurtech is ending, while wave two is just getting going. (I’ve seen people say that the first wave has passed startup phase and is into “scale-up” phase, as the best prospects have now identified themselves and are attracting big chunks of capital.)

He is seeing more focus on back-office technologies that can create much-needed efficiencies and less on the sorts of distribution opportunities that showed up so frequently in the first wave of insurtechs, but he generally sees a host of opportunities because of the pandemic.

“COVID-19 has just changed the way commercial insurance will be purchased,” he said. “The number of people buying online has surged in the past six months, and that isn’t going to change. That cup of coffee to get to know someone or to review policy details just isn’t going to happen.”

Chris picked his own niche in classic fashion: He got annoyed at a problem and started a company to fix it, then pivoted when a customer pulled him into a new area that resonated much more broadly. Oh, and he got a little lucky, too.

After law school and a stint at a large firm, Chris became a solo practitioner and worked with clients on claims in the surety and insurance realm. Frustrated with all the paper he had to deal with, he started a company to digitize claims documents.

A customer had a better idea. An underwriter from a big insurer called him in 2014 and asked if she could use his technology with policy documents. Chris and his co-founder, Dan Burchett, agreed and began applying AI to the documents to do even more to help brokers with policy reviews.

“Policy reviews can take days to weeks if they’re really complex,” Chris said. “Even if a review just takes an hour, if you have lots of small accounts that’s still a huge amount of time.”

Chris’ approach to attacking that problem made so much intuitive sense that he quickly developed a following among those of us following the insurtech world. He was still scrounging for customers, but then the good fortune kicked in. Rick Huckstep wrote a piece about RiskGenius in the Daily Fintech newsletter in January 2016 and called the company “the Google of insurance.”

How can you ask for anything better than being called the Google of insurance?

“I was in Iowa doing the conference circuit,” Chris said. After getting off-stage, “I opened my phone, and it was flooded with messages. I was standing next to my sales guy, and I thought, ‘My gosh, we found a problem that is massive and worth solving.’

“We wound up with hundreds of leads. We never had leads before. I thought, I like this better.”

The rest, as they say, is history — except that I suspect that the RiskGenius deal is also the future. While a few companies like Lemonade will try for massive scale on their own, I think there will be a lot more deals that will pull a capability from an insurtech into a company that can deploy it as part of a broader offering that will have much more impact.

Stay safe.

Paul

P.S. Here are the six articles I’d like to highlight from the past week:

Why Haven’t More Startups Failed?

Insurers appear to be focused on tactical initiatives that can produce more immediate results in the pandemic, and insurtechs have the tools.

Optimizing Insurance’s Role in the Pandemic

Policymakers must thoughtfully position insurance industry capabilities where they can have the greatest impact. Here is a proposal.

COVID, and How to Pivot to Innovation

The pandemic has almost shut down entire industries, forcing companies to adapt — and doing incredible things for a pivot to innovation.

6 Cybersecurity Threats for Insurers

The insurance sector faces a bigger threat than most industries because insurers deal with extremely sensitive data.

Secret to Leadership in Insurtech Innovation

You need more than a product. You need to surround the product with proper execution, the right people and sustainable partnerships.

Managing Customer Opt-Ins in New Normal

Insurers need a single source of truth on opt-ins and opt-outs across the enterprise to solidify the relationship with the customer.

Keys to Loyalty for P&C Customers

In a rapidly changing industry, some P&C insurers are pulling ahead of their competitors by focusing on customer satisfaction and retention.

“The insurance industry as we know it is at the edge of a new business environment,” says  Michael Costonis , head of Accenture’s global insurance practice. “Breaking away from the pack and capturing new revenue opportunities requires a shift in business mindset – a shift from product-focused to customer-focused.”

Customers want extra benefits, and one way to provide them is to offer value-added services. Travel companies and other insurance branches are already exploring the benefits of value-added services for retaining customers, as  Jamie Biesiada  at Travel Weekly points out. Because P&C insurers have been slower to adopt this strategy, however, many opportunities for capitalizing on this strategy remain.

Here, we look at some of the most popular value-added services in P&C insurance, which of these services focus on building loyalty and how to create the right service offerings or packages to encourage your customers to stay with your company in the long term.

Value-Added Services: The State of the Industry

For many years, P&C insurers have struggled with the challenge of selling a product that is substantially similar to their competitors’ products. “Because customers don’t discern much difference between insurers, companies end up competing largely on price,” write Bain & Co. partners Henrik Naujoks, Harshveer Singh and Darci Darnell . A downward spiral occurs, in which costs and profits are cut and customers jump ship the moment they see the same coverage for a few dollars less.

See also: How to Build Customer Loyalty in Insurance  

When insurers compete on price, customers do what Brandon Carter at Access calls the services shuffle: quitting or threatening to quit their insurance providers to access the same price-lean deals that new customers receive. “My goal is to pay less in a system that actually punishes people for being loyal customers,” Carter explains. Focusing on cost decimates loyalty. Focusing on value can boost it.

Yet insurance companies aren’t making value-added services their first choice when it comes to customer retention  Tom Super, director of the P&C insurance practice at J.D. Power, adds that many P&C insurers are turning to digital tools to court customers, particularly in the auto insurance business.

But digital technology is only a tool. The insurers that will stay ahead of their competitors in the race for customer retention and loyalty are the ones that best leverage that tool to provide the value customers want, says Mikaela Parrick  at Brown & Joseph.

Which Value-Added Services Boost Customer Loyalty?

Value-added services provide an extra benefit that enhances the core product or service. This additional service may be offered at little or no cost for the customer, yet it may make both the customer’s and the insurer’s work easier.

Connecting experience-based services to the product and brand can be a powerful way to encourage loyalty, adds Roman Martynenko , the founder and global executive vice president at Astound Commerce. While this approach is most commonly seen in retail, P&C insurers can adapt it to their needs. A top-of-the-line mobile app or a personalized starter kit featuring smart tools for each customer’s home can make customers feel like they’re part of a family.

Unique, innovative or specially tailored value-added services can also help encourage loyalty and boost customer interest by becoming a cornerstone of an insurance company’s brand.

Value-added services don’t have to be expensive or complex, suggests Mike McGee of Investment Insurance Consultants. For instance, a disaster preparation email sent at the start of tornado or hurricane season can help customers take loss-prevention steps, address safety and feel supported by their insurer, at very little cost to the insurance company.

Partnering with other companies can boost loyalty for both organizations while providing value-added services that attract customers, digital transformation executive Fuad Butt says on the IBM insurance industry blog. For instance, working with telecommunications providers to offer reduced-rate packages can help both companies succeed.

A highly specific partnership that uses existing technology to add value for both customers and companies is the recently announced alliance between Hyundai Motor America and data analytics firm Verisk.

“Hyundai customers will have access to their portable Verisk driving score, which can lead to discount offers on UBI programs and support driver feedback that helps improve their driving,” says  Manish Mehrotra , director of digital business planning and connected operations for Hyundai Motor America. A similar arrangement through an auto insurer can help both insurers and drivers have access to more information to improve safety and make better choices.

Choosing and Implementing Value-Added Services in P&C Insurance

The changing landscape of insurance offers one significant advantage to companies seeking to improve their value-added services: access to data about why customers remain loyal.

“The connections that enable excellent customer experiences aren’t always easy to make,” says Chris Hall of Pitney-Bowes. Siloing fragments customer information, leaving staff without a complete picture of each customer. This fragmentation makes it difficult to determine which value-added services will actually pique customers’ interest.

If data access is an issue, start by de-siloing information to get a better sense of each customer. Then, find the services that best support your organization’s key differences from your competitors.

Kirk Ford , compliance and T&C manager at RWA Business, suggests first considering how you’d like your clients and customers to perceive your brand in relation to competitors. Balance your differences against your similarities so that customers see they’ll receive all the services they need, but with the value-added extras that make their relationship with this particular insurance company meaningful.

See also: The Future of P&C Distribution  

However your insurance organization chooses to add value, resist the urge to announce it to customers merely as being higher-quality. “It doesn’t matter whether or not a company can pull off quality or exceptional service because quality and customer service rarely are differentiating strategies,” adds  Mac McIntire , president of the Innovative Management Group.

Instead,  Ryan Hanley  formerly of Agency Nation, now at Bold Penguin, recommends finding ways your value-added services can improve customer lives. When customers feel a sense of shared values, they’re more likely to stick with their insurance company, rather than risk their luck with a company that may not share those values—even if the prices are lower.

One way to connect with customer values is to change your company’s language surrounding insurance. “If you can sell insurance and not talk about insurance, it’s a win-win,” says  Rusty Sproat , founder of Figo Pet Insurance. He notes that many customers find insurance language obscure and frustrating. That’s why Sproat’s company focuses on providing quality information on pet care and health, switching the conversation to insurance only when necessary to complete a transaction.

Finally, don’t shy away from technology—but use it as a tool rather than a cure-all. Smart home sensors, telemetrics for vehicles and other tech tools are increasingly common in U.S. households, plus they can greatly improve the customer experience, says  Ramaswamy Tanjore  at Mindtree. Consider the best ways to manage telemetric or other data, as well as how to position these tools to best showcase their value to loyal customers.

7 Things I Learned at Bold Penguin

This is my first week at Bold Penguin… marking the true beginning of my insurtech life.

I’ve followed insurtech for more than three years, writing and speaking on the movement, but my vantage point has always been one of the intrigued outside observer.

And while one week does not make you a qualified insurance technology startup guru, here are my first seven insights after diving headfirst into my new role as chief marketing officer at Bold Penguin.

1) Small Business Insurance Is the Holy Grail

McKinsey & Company has been referring to the SMB market as one of the “few bright spots” in the property/casualty insurance sector for years now.

Why?

Because no one owns the small business insurance space. The marketplace is fragmented, and generally speaking the commonly accepted customer experience is poor at best. Yet, done right, small business insurance is a growing and profitable market segment.

This is by no means breaking news.

That doesn’t diminish the fact that no one has small business insurance figured out, (except maybe…), making the SMB market the holy grail of meaningful organic growth for the foreseeable future.

2) There Is No Road Map

In case you’ve never worked for a startup before, there is no road map for success.

Insurtech startups are creating solutions that haven’t existed before. Look at the work that Chris Cheatham is doing in policy automation at RiskGenius or Mike Albert and Allan Egbert are doing in open APIs at AskKodiak.

Quite literally, they’re making things up as they go along.

…because they have to. The work lives in uncharted waters.

My point is, just as insurtech startups must mature into the greater insurance ecosystem that has existed for more than 400 years, the more traditionally oriented organizations (and individuals) must accept the slightly more haphazard nature of startup companies.

Insurance carriers with open-mindedness to the realities of trailblazing startups will position themselves out front as the partners of choice for insurtechs mapping solutions for our industry’s most challenging obstacles.

See also: An Insurtech Reality Check  

3) There Is a Race to Remove Friction

Research from a McKinsey & Company survey shows a 73% increase in customer satisfaction when customers reported they were pleased with the entire customer journey, not just specific touch points.

Winners and losers of the digital insurance revolution will be determined in the race to remove the most friction from the customer experience.

This doesn’t mean removing human agents or blowing up the traditional insurance carrier model. Rather, we must think of insurance as a service and create flow throughout the customer journey.

I joined Bold Penguin because it’s my belief that their solution will be the foundation upon which many winning agents, brokers and carriers build their unique customer journey.

Whether you partner with Bold Penguin or not, make no mistake, the race to remove friction is real and it’s happening right now.

If your organization is not having serious conversations about the customer journey, you’re already losing.

4) It’s Time to Ask “What if?”

It’s time for everyone to start asking “What if?” when it comes to the future of insurance.

  • What if APIs are the future?
  • What if customer experience is all that matters?
  • What if we can’t build it ourselves?
  • What if half our agency plant retires in the next five years?
  • What if our carrier partners demand digitization?

Whether you believe these scenarios will come true or not isn’t the point. The insurance marketplace is changing rapidly and being prepared for all the “What if?” scenarios possible is the only way to survive…

…because no knows what’s actually going to happen.

5) Disruption Is Dead

From now on, every time you hear the words “disruption” or “disruptor” come out of a startup’s mouth, your insurtech B.S. alarm should leap to life, the blaring sirens and seizure-inducing flashing lights overwhelming your senses while an impenetrable B.S. Protection Barrier envelops your entire body like some scifi force field.

Seriously though, disruption is not the answer.

Instead, insurtechs should focus on collaboration, facilitation and integration with traditional partners, building on the previous foundation as much as possible and alongside where it does not.

6) Culture, Culture, Culture

I’ve seen first-hand the impact a toxic culture can have on organizational success.

We live in a tumultuous time for workplace culture. According to the American Psychology Association, the workplace continues to be a leading cause of stress (with 61% of Americans listing work as a significant stress factor).

We’re under more pressure to spend more time, to get more done every single day. Work-life balance has become a cliche joke.

While I believe in hard work, giving more of yourself than is asked in the job description and just kicking ass in general, organizational culture must be a fit to achieve our goals of world domination.

Here are three aspects of insurtech culture vital to success:

  1. Always put staff satisfaction first. An inspired team believes, an uninspired team blames.
  2. Never blame the customer. Period. Own your outcomes. The customer may not always be right, but the customer is never wrong.
  3. Don’t take yourself too seriously. As an old mentor used to tell me, “Everybody ?s.”

I’m sure there are more. But these were the three most obvious to me after spending time at the Bold Penguin headquarters this week.

7) Your Story Matters

Your story matters as much as your product.

It doesn’t matter how amazing, revolutionary or game-changing your product or solution is, if your story doesn’t make sense, if people can’t connect the dots between your solution and how it benefits them and their organization, your product essentially doesn’t exist.

This is something we need to do better at Bold Penguin.

We’re not amazing at telling our story today.

We’re going to change that.

One of many reasons I joined Bold Penguin was that the whole story had yet to be told.

I feel like I’ve found a gigantic diamond just lying there on the sidewalk.

And while everyone else walks past, oblivious to the treasure they’ve just nonchalantly stepped over, to the trained eye all it takes is a craftsman-like approach to telling the story of what Bold Penguin can do for insurance agents, brokers and carriers to unlock industry defining value.

But Bold Penguin isn’t alone. Wait until you hear about what Joseph D’Souza is doing at ProNavigator, or Jason Keck at Broker Buddha, or Phil Edmundson at Corvus Insurance.

Having a great solution is the barrier to entry. For anyone to care about your company, you must to be able to tell your story.

See also: Innovation: ‘Where Do We Start?’  

The Rub

According to the most recent CIAB Market Study, “Driving organic growth, hiring and recruiting talent and enhancing the customer experience remain top organizational priorities” for the U.S.’s top insurance brokerages.

With 80% of CIAB’s responding agents and brokers listing “driving organic growth” as a top priority for 2018, it’s exciting to be part of a company working to solve organic growth concerns, not through disruption but through collaboration, facilitation and integration.

You can find the article originally published here on LinkedIn.

Click here to learn more about Bold Penguin.

An Insurtech Reality Check

If you’ve got your eyes set on technology that won’t move the needle this year, it’s time to reevaluate what can provide bottom-line results in the short term. AI and machine learning will have their day in commercial insurance. But what are you doing today to drive tangible business results? Insurtech does not have to be a “pie in the sky” endeavor. It can be deployed right now.

Just a year ago, the insurtech conversation was all about innovation labs, blockchain, IOT, wearables and, of course, AI. Now, the dust has settled a bit, and the realization has set in that those bright, shiny objects may take years to make a real impact on re/insurers’ bottom lines. While they are still undoubtedly vital to innovation, long-term success and survival, it’s important to strike a balance between “pie in the sky” and practical. Last year’s devastating catastrophes served as a catalyst for more focus on short-term solutions that can improve bottom lines—now. Not years from now. This swing to here-and-now solutions was recently articulated in an article by Ilya Bodner, founder of insurtech startup Bold Penguin, where he notes:

“Insurtech is moving rapidly now into commercial lines where the attention and intent is focused on solutions that will deliver a strategic and immediate return on investment (ROI)….Insurers are moving away from bright, shiny, insurtech objects and toward service partners, emerging technologies and solution providers with a return on investment more immediate than promised for five years down the road.”

I second this sentiment. P&C risks are changing, as evidenced by 2017’s $144 billion in global insured losses and a commercial lines combined ratio of 104%. And, while a strong market made many insurers whole last year, that is not a guarantee going forward. The next hurricane, flood or wildfire won’t wait for you to innovate. Insurers must find ways to bring innovation to their bottom lines now. Don’t get me wrong, pie in the sky is good—and it is necessary. But insurers must strike a balance between their long games and short gains. You need both.

Caution: The hard truth

I don’t have to tell you that following last year’s back-to-back hurricanes there was an outcry about how the models got it wrong (of course, it didn’t help that some modelers put out early and grossly inaccurate estimates that incited market confusion and concern). Here’s the hard truth: Insurers also got it wrong. Got it wrong by using a single view of risk; by not taking advantage of innovations in data; by taking too long to operationalize data; by waiting for the perfect, utopian platform (in-house or commercial) to be built or delivered; by expecting legacy analytics software to deliver the scalability, reliability and insight required to act efficiently and effectively. No longer can insurers approach risk The. Same. Old. Way. Risk is changing. You must change with it. And the good news is, integrating insurtech in a way that helps you better assess and manage the evolving landscape of catastrophe risk doesn’t have to be time-consuming or costly, and it can produce immediate results.

Here are a few of the challenges that insurers face that insurtech can help them address, in the here and now:

  • Reality: Models provide a “framework for thinking; they don’t represent truth.” Evan Greenberg, chairman and CEO of Chubb, recently stated, “Given there have been three one-in-100-year floods in 18 months, how can Harvey represent a 1% chance of occurring, as the models suggested? Models provide an organized framework for thinking; they don’t represent truth.” Now, we all know models serve an important purpose, and our clients can derive insights from modeled data within our platform. But models must be taken with a dose of good old-fashioned human judgment. Models and the outputs are nuanced. It’s all about identifying the right models and model components that best represent your lines of business, geography and business practices. But it’s also about balancing resources and business value with this expensive exercise. You need to have an intelligent conversation about model nuances—and figure out the “so what” questions that models provoke but don’t answer.

See also: Can Insurtech Rescue Insurance?  

  • Reality: You can’t handle all the data. There’s a gap between the wealth of data now available and an insurer’s ability to quickly process, contextualize and derive insight from that data. Insurers are generally frustrated by a lack of process and an easy way to consume the frequent and sophisticated data that expert providers put out during events like Harvey, Irma, Maria, the Mexico City earthquake and the California wildfires. Beyond the sheer volume of data, insurance professionals are expected to make sense of it by using complex GIS tools. In reality, you have all this data but no actionable information because you can’t effectively make sense of it. Even insurers with dedicated data teams and in-house GIS specialists struggle to keep up. (SpatialKey tackles this problem by enabling expert data from disparate sources (e.g. NOAA, Impact Forecasting, JBA, KatRisk) and putting it into usable formats that insurers can instantly derive insight from and deploy throughout their organizations. We do the processing work, so our clients can focus on the analysis work.)
  • Reality: Your best data is your own, but you’re not benefiting from it. It’s one thing to be in possession of data, and quite another to be able to realize its full value. Data alone has little value. One of our clients, for example, needed a way to re-deploy its own data to its underwriters, so we helped the company integrate an underwriting solution that would put its data, along with expert third-party data, in the hands of its underwriters—all from a single access point that would consolidate disparate sources and drive enterprise consistency.
  • Reality: Your customers expect on-demand; you should, too. Your customers don’t want to wait for a quote or go through a lengthy process to submit a claim. Our society is instant everything, and while commercial insurance may not be held to the same real-time pressure as personal lines, it is moving in that direction. When you need the latest hurricane footprint, you need it now, not four hours from now. When an earthquake strikes Mexico City, you need to understand your potential business interruption costs today. When a volcano is erupting and no drones are allowed in the surrounding airspace, you need a geospatial analytics solution that can help you provide advanced outreach to insureds and do the financial calculations to understand actual exposure. Likewise, when your underwriters are trying to win business, you’d rather they spent their time evaluating the risk than searching for information.

Who knows what this hurricane or wildfire season will hold. The question is, are you prepared to handle it better than last year? What changes have you made to strengthen your resilience and that of your insureds? What has been learned and applied for meaningful results? It’s a misnomer that insurtech and disruption go hand in hand. Some insurtech solutions are built to complement—to drive efficiencies, cost savings and underwriting profitability—not necessarily replace existing processes or legacy systems. Data and analytics is an area where insurers, brokers and MGAs can still improve their bottom lines yet in 2018.

See also: To Be or Not to Be Insurtech  

Take down the pie and dig in

My intention is not to dilute the importance of up-and-coming insurtech technologies, like AI and machine learning. They will undoubtedly help insurers compete as risks become more complex. My point is that those longer-term technological investments must be tempered with an understanding of what technologies will help move the needle in the present. You can strike a balance between pie-in-the-sky insurtech and insurtech that works for you now.

To Be or Not to Be Insurtech

It is probably a bit presumptuous to liken the insurtech startup movement to Hamlet’s famous “To be or not to be” soliloquy. It is, after all, a well-known and historical Shakespearean reference. However, the similarity is in the questions asked, and such a question has probably been asked prior to many defining moments. And just as Hamlet pondered many questions, there are many questions that revolve around the state of the insurtech movement. At this juncture, some five years into this movement, the one question that has most likely gone by the board is – Is it real?  You can debate whether we are at the beginning of the insurtech cycle or at the end. However, there are several strong points in favor of the fact that it is real.

See also: Convergence in Action in Insurtech  

SMA has been following the insurtech startup trends since 2013. Currently, we track approximately 1,200 insurtechs. It is definitely a fluid number. Some startups go out of business, and others come in to fill the void at a regular pace. In the 2013-2015 timeframe, the insurtech startup landscape was a tsunami of activity – it was difficult to get one’s arms around what was happening. In the latter half of 2017, some strong realities emerged. SMA’s recently released research findings have revealed several major insurtech trends or themes that are specific to insurance and have meaningful implications for the industry. In response to the “is this real” question, three of the 10 themes anchor the insurtech movement firmly in reality.

  • Insurtech has spread to all tiers and lines of business – Originally, most of the activity was in personal lines and health. Now, of the P&C contingent, which SMA data indicates is 39% of all the activity, a little over half is personal lines; 35% is commercial lines; 13% is workers’ comp. Historically, technology providers have targeted particular tiers for their sales efforts. The startup community targets insurance business problems without a specific tier focus. What this means is that insurers of all sizes are able to adopt insurtech-provided technology. SMA partnering data shows that there are insurtechs with customers ranging from top 10 insurers down to single-state insurers. The bottom line: The fact that insurtech is not focused on the top echelon of global players but rather on business problems across the insurance ecosystem lends itself to the “it’s real” theme.
  • Live implementations are increasing – Not surprisingly, in the beginning of the startup movement, most of the activity was around fundraising and proofs of concept. In 2017, and continuing at an accelerating pace in 2018, insurer “go lives” are happening. Some insurtechs have 10, 12 or more insurer logos on their websites. These are not investor listings; they are the names of insurers that are rolling out capabilities in the marketplace. In particular, drone usage, smart home/connected property and connected vehicle initiatives are common and growing. The “it’s real” indicator is that insurers are not going to roll out technology that affects their customers just for the fun of it – customers are not guinea pigs. Insurers are seeing the value in insurtech offerings and are executing.
  • Insurtechs are partnering – While there is nothing wrong with a technology provider staying in their space, a long-standing trend within the insurance industry has been partnering for greater value. This has not escaped the attention of a number of insurtechs. For example, Bold Penguin and Ask Kodiak have partnered, as have Elafris and Hippo and Betterview and Understory. Mature technology providers also see the value of startup partnering; for example, Willis Towers Watson and Roost, Verisk Analytics and Driveway. Majesco partners with a network of insurtechs. The “it’s real” factor is that insurtechs are not simply attempting to see what they can do just for today – but, rather, what they can do for the long haul, to become strategic contributors within the insurers they work with.

While there are still questions about the insurtech movement, one of them should not be – Is it real? Business value is being generated by many startups – and no insurer is going to walk away from that. New channels and service opportunities are emerging that are generating interest and execution. New products are sprouting up at a regular pace. Not every startup and every idea is going to be a winner, but many will be. And some already are. Bottom line? Both Hamlet and Shakespeare would be proud of the insurance industry for seeing the possibilities and not just the questions.

See also: 4 Key Qualities to Leverage Insurtech