Q&A: Alex Schwarzkopf, Pillar TechnologiesPosted On: Sep. 25, 2019 4:28 PM CST
The data sensor made by Pillar Technologies Inc. and used on construction projects collects information and readings on such things as temperature, moisture, and particulate matter, but that is just the beginning, according to New York-based founder and CEO Alex Schwarzkopf, who spoke with Business Insurance Reporter Matthew Lerner recently about what Pillar does, where the company is heading and hurdles to overcome. Edited excerpts follow.
Q: How has your end of the insurtech world changed, and over what period of time?
A: I can tell you that specifically in our space, it takes time, it’s been slow. Within the last year, though, I’ve never gotten more outreach from carriers. It’s been insane. For whatever reason, in the last six months to a year, I’ve had more engagement from carriers, more folks reaching out saying, “We want to bring these innovative solutions to our clients,” so something is happening, something is changing.
Three years ago, I think the idea of including technology inside of an insurance program was bleeding edge. Now, I think it’s something that folks are saying “Hey, we, you should really be taking a look at this.” And then the next year to two years, I think you’re going to start to see folks requiring certain types of technologies as part of their insurance programs.
From a macro perspective, I think the carriers are understanding that they can’t do everything themselves anymore. The amount of different types of innovation that’s coming and the rate at which it’s coming really makes you start to look into what’s your core business.
Q: What do you see as the main hurdles for technology adoption?
A: Cost I don’t think is a huge issue anymore. I don’t think that’s really a driver anymore. I think the one challenge is that you have to spend money where you never spent it before. Why am I spending $500,000 on this new data analytics and tool? Do we really need it? You’ve never bought it before. IT looks at that and asks, “Why are we adding new cost?” Adding something is tough.
I think organizationally there’s always challenges. I’ve noticed that there’s different levels of maturity across the leadership teams at different carriers in terms of their view on technology and how it’s going to change their business.
Some companies are farther down the course than others for whatever reason. One of the biggest challenges for us was identifying which carriers wanted to move at the speed that we needed to move to make it make sense for our business.
If we’re around for the next 20 years, we’ll probably have partnerships with all the carriers, but we don’t right now. We have two partnerships with some of the more forward-thinking carriers
With one of the carrier partners we’re working with, start to finish, our engagement was four to six months and with some of the other folks I’ve been speaking with, we’re going on two years in terms of just trying to figure out what to do.
Q: Are there new people needed? Whether it’s Pillar or your partners or the construction companies, do construction companies need to hire data scientists or chief information officers?
A: They’re already doing it. Yes, the roles are changing, and with every change people will be displaced, so I do think that it’s going to happen, I just don’t know at what scale.
In commercial, though, it’s going to be far less. Commercial is still complex risk, highly people-driven. The infrastructure that is in place with the broker community, the carrier community and then the end client I think is very, very strong.
Q: What benefits should users expect from adopting technologies?
A: I think it really depends on the technology you choose. All the technologies are doing something for someone, whether it’s efficiency creation, where they were paying more. In our particular case, we look at it as short- and long-term (return on investment).
The long-term vision for Pillar is actually to use the construction cycle as the opportune moment, if you will, to sensorize a building for long-term risk management. Because when a building is being built, there’s no walls, there’s no roof.
My vision is that buildings that do this are going to be able to access different property insurance products. So, over time, the savings on your property program, even if it’s a couple points, is going to pay for itself.