Insurtech Landscape 2019: Top 5 Takeaways
Philippe Lafreniere | October 11, 2019
I just crossed my one year mark at Slice Labs. Happy anniversary to me! This is my 26th year in the industry during which time I’ve been a part of some pretty exciting initiatives that took me around the globe. This past year has been a whirlwind of learning, milestones, and a glimpse of what we might see in the not-too- distant future.
Joining Slice was like jumping out of a plane in mid flight and landing on a rocket. We launched a new digital insurer in Canada, rolled out a first-of-its-kind subscription cyber product in the U.S. with AXA XL, launched the company in the UK and Asia Pacific, won a few industry awards, launched Slice Mind, our lead data scientist was recognized as a global "top 40 under 40," and got to share our views at countless industry events globally. The interest and demand technology very high, but as I have worked with insurers directly I’ve observed a few trends that are holding many back.
1. We like the shiny new toys. As an industry, we are overwhelmed with all the new tech that can transform our business from driverless cars (that will take a bit longer than we think), satellite imagery for wildfires, AI, and the power of drones. Any given insurer that attends one of the insurtech conferences is like a kid in a candy store. That’s great,but we can’t tackle all of these at once; we need to pick a specific tech and prove its potential value through a set of quick use cases.
2. We feel we need to do things the way we have always done them. After the excitement of seeing the shiny new toys at the latest insurtech conference, you take some ideas back to HQ and then hit a wall: “Let’s do an RFP.” The pace of innovation and change is rapid; the landscape has changed. There are new ways to engage and evaluate a specific technology, business model, or partner. We have noticed that via a hands-on hackathon, you can learn nearly everything you need to know to dip your toes in the water, and at the end of that process you have something real and measurable to take to market. It might not be perfect but it will give you good insights.
3. Innovation teams are good, but need a mandate and a landing pad. For so long through my career, I did not really come across people with Innovation in their titles; now they are ubiquitous. I think it is great that insurers are dedicating so many people and teams to innovation. A few months ago we covered this topic via a podcast with Celent and Cooperators, with some really good pointers on innovation. What I have noticed more often than I had hoped, however, is the lack of a landing pad to execute on some of the innovative ideas/concepts that those teams want to try. The business should have bandwidth to implement innovation on a regular cadence. The innovation teams should be the ones on the critical path to have vetted new opportunities and drop them in a hopper.
4. We need to look for new KPIs and a bit longer term. Over this past year we got to work with some great teams that recognize that we are undergoing radical changes in how insurance is perceived, sought, purchased, and used. They also know that change won’t happen overnight. Therefore, we need to come up with new key performance indicators that allow us to determine viability and success of new concepts differently than we have in the past. We need to look beyond policies sold, loss ratios, and profits. While all of those are important, give yourself enough runway to really test and learn, whether with a new product, segment, using AI for underwriting or claims, or alternate distribution. This being said, it is also OK to fail. Just fail fast.
5. Insurance will definitely be different. The last thing that is certain, however, is that insurance will be different. From products, to the entire end-user experience, whether it is still a stand-alone insurance product or it is embedded as part of buying a car or going on vacation, there are too many forces at play to ignore the fact that our business is radically changing. Those that come out on top will have their eyes where the puck is going versus where it is (hey, I am Canadian and the new season just started so of course I had to somehow weave in hockey!). Working with these types of insurers and seeing real progress is quite exciting.
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