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Startups Take a Seat at the Table

In an industry where experience matters, and where specific domain knowledge has traditionally been prized above all other things, startups are increasingly being included in strategic conversations, and given a seat at the insurance table. Insurtech startups are bringing important emerging technology innovations and smart business solutions to a stalwart industry, and interest and investment in insurtech is climbing steadily. With the pace of change and competition increasing, as well, leading industry incumbents are beginning to pursue collaboration with fresh partners and platforms.

Age Is Just a Number

There is no right age for launching a startup, or for undertaking an innovation initiative, but many naively assume that younger is always better. In fact, some mix of experience in the industry being targeted along with an innovative idea and entrepreneurial state of mind are likely the best combination.

The Global Insurance Accelerator (GIA) in Des Moines, for example, provides support to insurtech startups worldwide through a mentoring system that matches industry professionals with startups for a chance to better focus product-market fit. The average age of program participants working from Des Moines has increased each year since inception in 2015. The average age was 35 in the first year. It bumped one year to 36 in 2016, and jumped to 40 in 2017.

See also: Will Startups Win 20% of Business?  

This mix of new voices and seasoned experts proves that innovation doesn’t have to come exclusively from one generation. Leveraging industry knowledge and experience with ideas from newcomers can lead to great things when attacking problems worth solving.

Everyone Needs Mentors

Over the course of three cohorts at the GIA, a shift has occurred in the amount of insurance experience the entrepreneurs had coming into the program. In 2015, only a couple of participants had worked in the industry. Now, in 2017, the pendulum has swung to the other end of the spectrum, and almost every member of the cohort has worked in insurance at some point during his or her career.

However, this prior industry experience hasn’t diminished the impact the GIA’s mentors have on any given startup’s evolution. The amazing pool of mentors who have raised a hand and taken a front seat in helping these early-stage InsurTech startups navigate a complex industry remain critical to the program’s success. Although the mentor role is largely to guide and advise, almost all of the GIA’s more than 100 mentors have reported learning as much from the startups.

Collaboration Is Key

There are six companies currently participating in the 100-day GIA program from a combination of the United States, Canada, Germany, and Serbia. The ideas and products offered by these InsurTech startups differ, as do the technologies powering the innovation, but these startups are all entrepreneurs who understand the vast opportunities within the insurance sector.

Moving to the main stage, GIA’s InsurTech startup cohort members gain a seat at the table this Spring during the fourth annual Global Insurance Symposium in Des Moines. Sitting alongside peers in one of the global hubs of the insurance industry, these startups will be able to both learn from seasoned industry experts and share wisdom as well.

See also: 5 Challenges Facing Startups (Part 5)  

The Global Insurance Accelerator experience will culminate in a panel discussion at the Global Insurance Symposium which will discuss lessons learned, and provide an opportunity to network with leaders from around the industry. This experience will allow GIA’s cohort to better understand the industry so transformation can continue from the inside out.

Collaborative efforts like these will not only allow insurance industry players to remain relevant and competitive, but to transform the insurance industry by meeting customers’ needs through new and improved methods.

Observations From InsurTech Week

InsurTech Week 2016 hosted by the Global Insurance Accelerator in Des Moines was a great experience. It is quite interesting to see the energy, excitement, new ideas and investment in the insurance industry. Brian Hemesath and his team at the GIA have done a great job of harnessing this activity and being a positive force for change in the industry.

There are two themes I would like to highlight. The first is that the ingenuity and sheer variety of the startups is astounding – and will ultimately be a great thing for the industry. The second theme, and perhaps the more subtle one, is that there is a collegial atmosphere and a common sense of purpose about the role of insurance in society and business.

See also: Insurtech Has Found Right Question to Ask  

Variety and Ingenuity

The 11 insurtech startups participating in this InsurTech Week are a microcosm of the larger movement. A few examples are illustrative.

  • Abaris – an innovative, direct-to-consumer solution for retirement planning, starting with income annuities.
  • Insure A Thing – an idea for a revolutionary new business model for insurance that includes making payments in arrears (post-claim).
  • Denim – a social media ad platform for insurance with a vision to ultimately reimagine marketing and distribution.
  • ViewSpection – a mobile app for DIY property inspections to help to inexpensively provide more information to agents and underwriters.

The other participants also had innovative solutions for various lines of business and addressed key business issues in insurance today. They are: Ask Kodiak, Gain Compliance, Montoux, InsureCrypt, Elagy, CoverScience and Superior Informatics.

Some are in the early stages. Some originated outside North America and may or may not enter the market here. Some may not even be approved by regulators in their current form. But that is true of the broader set of the hundreds of insurtech companies that are active today.

The main point is that there is a great deal of innovation here, and many of these companies will play a role in the evolution of insurance, one way or another.

Collegial Atmosphere

The founders and investors in insurtech companies certainly desire to make money. Insurers that are engaging with these firms hope to gain competitive advantage. But in keeping with the culture of the insurance industry, there is also a great atmosphere of collaboration and even a sense that there is a higher purpose.

I don’t want to sound too dramatic, but there is a sense of altruism here – a sense that there are great opportunities to make the world a better place. Many of the insurtech companies see opportunities to improve safety in homes, in businesses, in factories and on the roads. The potential to significantly reduce accidents and deaths is tangible. Providing new services and capabilities to enhance lifestyles, improving individual well-being and just making it easier for customers to do business with the industry are also common purposes.

There is a spirit of cooperation among insurers, insurtech and other industry players, even in cases where companies are competitors. Not to criticize other industries, but insurance is about a lot more than selling a widget and making a buck.

See also: Calling all insurtech companies – Innovator’s Edge delivers marketing muscle and social connections

A Bright Industry Future

Overall, I believe this is cause for optimism for the insurance industry. It is not easy to transform from today’s business models, processes and systems into a future that embraces all the new ideas coming from insurtech. But many in the industry are now actively involved in building strategies, experimenting with new ideas and technologies, launching ventures and generally being willing to think differently.

While many industries are being disrupted, insurance is more likely to morph into a better version of itself, with incumbent players learning from and partnering with new players.