Insuretech can be added to all the other bubble gum inventions today. Have you noticed that practically nothing has been invented in the last 10 years except add ons to what we already have? Door Dash, Uber, cell phones technology. All ad ons. I guess the automobile, plane, and tire inventions are all gone.
Every time I see a new carrier talking about how their “technology-driven” insurance I want to vomit. All I see are algorithms that don’t work and cause tons of issues.
Rather than “I told you so” I’m going to stick with my line that I use every time I see news good or bad on Insuretechs. The Tech part is great, wonderful, amazing and innovative. But the Insure part…not so much. You cannot “tech” your way through the difficulties of the P&C business. It just costs too much to operate a P&C company, especially in areas of high litigation, constant catastrophes and overly rigid regulation, like Florida for instance. Your technology cannot, at the moment anyway, wipe out the cost of people, marketing, other (accounting and underwriting) technology costs, REINSURANCE, mistakes, legal representation.
History teaches us that most companies that begin with new innovations fail. The auto industry started out with many companies. Most failed but a few became very successful. About 25 years ago, many companies formed to take advantage of the new internet age. Most are gone today, but a few stayed around to become extremely successful. My guess is that most of these tech companies will not be successful, but at the end a few may succeed or their concepts will live on as bigger companies either purchase them or adopt their technologies.
The insurtech firms are basically allowing the buyer to do their own underwriting and selecting and even risk management for which they have no expertise. They drop coverage without understanding it to get their cost down. It’s easy to predict the Insurtech’s loss ratios will go way up over time. It’s naive to think the buyer will answer questions accurately or honestly with no one looking over their shoulder like an agent.
Insuretech can be added to all the other bubble gum inventions today. Have you noticed that practically nothing has been invented in the last 10 years except add ons to what we already have? Door Dash, Uber, cell phones technology. All ad ons. I guess the automobile, plane, and tire inventions are all gone.
Every time I see a new carrier talking about how their “technology-driven” insurance I want to vomit. All I see are algorithms that don’t work and cause tons of issues.
Rather than “I told you so” I’m going to stick with my line that I use every time I see news good or bad on Insuretechs. The Tech part is great, wonderful, amazing and innovative. But the Insure part…not so much. You cannot “tech” your way through the difficulties of the P&C business. It just costs too much to operate a P&C company, especially in areas of high litigation, constant catastrophes and overly rigid regulation, like Florida for instance. Your technology cannot, at the moment anyway, wipe out the cost of people, marketing, other (accounting and underwriting) technology costs, REINSURANCE, mistakes, legal representation.
History teaches us that most companies that begin with new innovations fail. The auto industry started out with many companies. Most failed but a few became very successful. About 25 years ago, many companies formed to take advantage of the new internet age. Most are gone today, but a few stayed around to become extremely successful. My guess is that most of these tech companies will not be successful, but at the end a few may succeed or their concepts will live on as bigger companies either purchase them or adopt their technologies.
The insurtech firms are basically allowing the buyer to do their own underwriting and selecting and even risk management for which they have no expertise. They drop coverage without understanding it to get their cost down. It’s easy to predict the Insurtech’s loss ratios will go way up over time. It’s naive to think the buyer will answer questions accurately or honestly with no one looking over their shoulder like an agent.