There is a fundamental need for reform and modernization, particularly in the London market. We should be electronically processing all lines of business, not just specialty classes. Of course, we should look at ubiquitous electronic placement too.
So what can we do about it?
There are some in the industry who do nothing as they watch insurtech startups struggle to get off the ground, while simultaneously complaining about the slow pace of change and limited innovation in re/insurance.
How can we marry the needs insurtech companies with the need for innovation in the traditional industry?
After all, the wide variety of insurtech and technology startups in general have one thing in common – they are all aiming to create better, faster and more transparent ways of doing business.
More Than Lip Service
In order to be successfully integrated into the processes of just one business operation, let alone a market as a whole, technology startups in any industry require support. Clearly insurtech startups require tangible encouragement and cooperation of insurance businesses to accelerate.
Our industry has been guilty of protectionism; in the past this has made it almost impossible for innovative minds from outside to break through and make a tangible difference. Innovative brokers have realized this and are leveraging their position as intermediaries in order to seek out and support fresh technology talent. After all, brokers must now do much more than just sell insurance in order to prosper.
Insurtech is not some sort of alchemy to be kept at arm’s length, ring-fenced into a vanity innovation unit that doesn’t really serve any kind of practical, investigative purpose. Innovation must be institutionalized in insurance, it must become a mindset of everyone in the insurance chain.
In practical terms, this support can range from offering office space to start-ups so that they can integrate with and learn from the industry, and vice versa, to facilitating meetings with financial backers in order to attract investment and grow the best concepts into functioning market-wide offerings.
Forward-thinking insurance organizations should consider creating dedicated divisions for exploring technology concepts, coupled with appointing someone in the organization to take charge of innovation, whose job involves liaising with entrepreneurs to find out and facilitate how the businesses can successfully work together. This includes offering start-ups streamlined access to market intelligence, advice on regulation and governance, support with business development, marketing and brand building.
Disruption to Stay Relevant
Failure is also acceptable, and the process is about knowing when to step away from a project more than anything, as well as using the valuable lessons you learnt to influence the next decision you make. No-one expects to find the Amazon of insurtech overnight, and it will take time and resources in order to support start-ups in this way. But a laser-targeted approach to acceleration should also include being the first to benefit from success by integrating new insurtech processes in your organization.
Disrupt your own company. If you don’t, you can be certain that someone else will and probably already has the wheels in motion. Look carefully at how other industries that are ahead of the curve have approached technology and startups, for instance, the banking sector, and learn from their trials and errors. It will save huge time and resources further down the line to start with a well-researched focus on what type of insurtech you are looking to support.
Developing Bespoke Products
And it doesn’t end with supporting the insurtech specialism. The re/insurance industry must simultaneously work much harder to develop coverage products that support the most modern business models and allow the best technology start-ups in all industries to get their businesses off the ground.
From bespoke medical malpractice products that allow innovative app-based healthcare services to launch, to specialist insurance for the sharing economy sector that facilitates short-term letting, the modern economy is developing quickly into new areas, and requires highly tailored insurance policies from companies that truly understand the nature of the risks being covered.
Insurance Building Blocks
Without insurance building blocks in their business, many tech startups exploring innovative new models would be unable to take those first steps. At AFL, we are committed to supporting entrepreneurs and innovators, and, wherever possible, integrating new processes into our own business.
The industry as we know it is facing fundamental changes, and the winners of the future will lead by example, supporting the latest and best ideas without fear of disrupting traditional business models in favor of more agile, proactive ways of working.
This doesn’t stop with new products and technology. The London market in particular is in desperate need of innovation in working environment and culture to be able to attract and retain the kind of talent capable of driving the industry forward.