If Insurtech was a startup business it surely would be seen as entering a ‘mature’ status, less the entrepreneur’s realm and more that of the operating entity. Sure, there are many new entrants into the insurance innovation space, many maturing Insurtechs finding their way and acting on goals, and many incumbents that have found able collaborators or acquisitions but in aggregate Insurtech has reached a status where novelty alone has been supplanted by expectations of utility.
It has long been the position of the Insurance Elephant that insurtech is not one aspect of the many that comprise insurance, but the collective environment that insurance is and that insurance customers need.
Looking at the evolution of insurance innovation over the past several years (if insurance evolution was geology we’d have to name the current era as part of an insurance continuum) much of the focus on change/improvement has been expense side oriented, making operations more efficient, underwriting more comprehensive, data access deeper and wider, data analysis more intuitive, etc. Expense focus is a terminal pursuit; the operations are made efficient, the costs are (hopefully) reduced, and the bottom line benefits. Expense focus however is a diminishing marginal return undertaking as there will always be expenses and expense management is a current period pursuit.
The largest portion of insurance revenue and costs are in the end directed to claim handling and claim service. Focusing on claims is hard work; insurance savvy is not always indemnity calculation savvy, customers express their general lack of awareness of how insurance provides protection in the claim resolution expectations that typically differ wildly from claim department actions and settlements. Transparency is always a victim of process, there’s an increasing need for claim handling intellectual capital, there’s tension between severity management programs and customers’ resolutions, and there’s always the fact that claim occurrences are almost by definition sudden. Insurance is not easy, claims can’t be predicted, and operations are chronically found as pennies on the dollar pursuits.
Getting back to the Insurance Elephant concept and its premise of Insurtech/innovation being not one aspect of insurance or another, but the entire ‘beast’, the ongoing efforts by hopeful and already participating insurance adherents is- no matter what part of insurance or related tech you are pursuing, look just beyond the innovation horizon and look for that little bit extra contribution, that additional 10%.
We speak of solving pain points and addressing market needs, white board the heck out of things, develop solutions, plans, and implementation schemes based on what has been agreed to as THE solution.
What remains promising for the insurance environment is the motivation, skills, focus, collegiality, and cleverness of those pursuing innovation. Regardless of where in the world one looks there are vibrant innovation communities focusing on insurance. Sure, the respective maturity of markets differ but the depth of dedication is a constant, even though the problems being pursued reside in differing points along an innovation continuum. Effort is effort.
Consider this- what if the answer you have found is (although great) not quite the full answer, what if with a new look or contrarian pursuit you find an answer that is 10 % better? What if your purposefulness is pressed a little harder and additional utility is gained for the industry and its customers? The greatest effort made is in building your concept, the marginal effort in bettering the concept may be small but with increasing marginal benefit.
And- consider how your concept is addressing the needs of the problem/pain point from an additional perspective of how it might affect or improve a collateral part of insurance. Every part of insurance dovetails with other parts; with some thought and effort your innovation or tech can be designed to also benefit the industry in ways that your whiteboard did not map out.
Insurtech is maturing and its efforts need to reflect those expectations of maturity, considering more than self and celebrating a concept’s success in the successes of others. An additional 10% is not too much to ask and the return on that 10% will surely be greater, and the insurance beast will appreciate the effort.