So much more than InsurTech
Working for a venture capital fund backed by a large, global insurance company means a few things. (1) Everybody thinks you know InsurTech; and (2), everybody thinks you only invest in InsurTech. In short, (1) InsurTech is newly burgeoning, and I certainly have views on the industry, which I will share below; and (2), we invest in everything FinTech, enterprise, digital health and consumer tech.
I submitted an abstract for the upcoming InsurTech Book, which is crowd-sourcing its contributions. It would be great to get feedback and bounce ideas on my thoughts on the space, and if you like what I have written, do please rate my submission! It is a teaser for what’s to come, and gives an insight into how I think about the InsurTech space.
Abstract: The Best ‘InsurTech’ may not be ‘InsurTech’
InsurTech is broader than meets the eye, or proper noun in this case.
InsurTech is a subset of FinTech, but we should be clear on what InsurTech really means. It’s about solving the problems of the €4 trillion insurance industry. Banking underwent a digital revolution, but a deposit-taking institution has not nearly as many concerns as one who prices and takes on risk.
The insurance industry is ripe for disruption for a variety of reasons: consumer expectations, legacy systems, demographic changes and at least on a non-life and health basis — changes in consumer behaviour with respect to underlying assets. There are numerous places in the value chain where technology can have an effect: distribution, pricing and underwriting, big data for better risk models, claims handling, reinsurance to name a few.
For insurers to remain competitive, they must think of ways to compete beyond just price. Insurance purchases come with a range of reasons and timings, ultimately it is a grudge buy. InsurTech should seek to make it a better experience, and a convenient one at that.
Incumbent insurers also tend to have back office challenges where pieces of the business do not communicate as well as they should, and could if the systems were built today. This becomes apparent when we get to consumer touch-points — policy purchase, potential claims and renewals.
For many, InsurTech paints the picture of a full-stack insurer that solves and does all the above as a digitally native carrier that acquires customers through the promise of better pricing and experience, while simultaneously giving more than just risk coverage to extract a better customer lifetime value. For me, InsurTech is something broader and may in some cases make incumbents invisible and parametric. Going further, the best InsurTech might not be identified as InsurTech at all.
If you didn’t like that, don’t worry, that’s the end of the abstract! If you did, then please kindly rate my submission, voting is open til the end of February (2017, in case you’re seeing this super late, by which point you should just buy the book and I may or may not be there).