Advancing insurance technology requires innovation, team effortPosted On: Oct. 17, 2017 11:20 AM CST
Partnerships and collaboration will be key to the success of new technologies in the insurance industry, which is behind other sectors in its technical evolution, according to a panel of experts speaking Monday at the Property Casualty Insurers Association of America’s 2017 annual meeting.
The insurance industry lags others in technology and is ready for change, panelists said.
“The industry is absolutely ripe for some significant evolution, and other industries are ahead of us on this evolution,” said Ed Largent, chairman, president and CEO of Cleveland-based Westfield Insurance Co.
There are positive signs of growth, however, with the number of technology startups now estimated to be roughly 1,500, according to Tony Trivella, executive vice president of the treaty division for Hartford Steam Boiler Inspection & Insurance Co., Hartford, Connecticut.
“This industry is now the No. 2 industry attracting venture capital firms, with over 140 venture capital firms looking intently at our industry” with cumulative funding at about $6 billion, Mr. Trivella said.
But funding and interest alone may not be enough to drive change, which will take partnerships and collaboration, according to the speakers.
“We have all these different things coming onto the industry,” said Keith Moore, CEO of San Francisco-based CoverHound Inc. “Having one single entity be able to take on all those responsibilities and be the master of those is going to be impossible. So this is where partnerships, the ability to partner and to innovate — those skill sets will be a hyperfocus for the next two years.”
Others on the panel agreed. “The best way to do research and development, to help create your future, is to partner and engage with these companies,” said San Francisco-based Jacqueline LeSage Krause, managing director of Munich Re/HSB Ventures, the venture capital arm of Munich Reinsurance Co.
Collaboration will especially be needed for one critical element of the industry’s technological growth: the ability to scale up emerging technologies, said Tim Attia, co-founder and CEO of insurtech startup Slice Labs Inc. in New York.
“We can do the innovation, but then we have a problem with scaling,” Mr. Attia said. “The scale exists with the incumbents. As startups, we can innovate but we can’t scale, and I think the incumbents can’t innovate but have scale. If we come up with an innovation that needs to get everywhere, then we have to partner with somebody to get scale.”
He added that it is best when each player contributes what it does best.
“Scaling is very difficult, by the way,” Mr. Attia said. “You don’t want to go out there and scale the way we innovate. We break a lot of glass when we innovate.”