LAS VEGAS – The insurtech sector is well-positioned despite second-quarter data showing a year-over-year decline in funding, but companies may need to refine their strategies, according to speakers and attendees at the InsureTech Connect conference in Las Vegas last week.

There has been a sharpened focus on profitability and sound business plans for technology startups, they say.

In addition, some experts say there will always be a human element in the large account insurance sector amid a growing war for talent driven by the tech revolution.

“The focus in venture capital is very much on growth. In insurance, the focus is on profitable growth. It took awhile for that to hit home,” said Jacqueline LeSage, managing general partner in San Francisco for Munich Re Ventures, the corporate venture capital arm of Munich Re Ltd. “There’s a lot earlier emphasis on creating businesses that are profitable,” she said during a panel discussion at the conference.

Ms. LeSage described the past five years as a “roller coaster” for insurtech companies, particularly for full stack companies, or those technology companies that seek to underwrite risk. That wild ride does not, however, signal a death knell for insurtech, she said.

“For growth companies, certainly there is now more of a focus on path to profitability whereas in the past there was more of a willingness to accept growth,” said Ali Inan, U.S. FinTech industry leader in San Francisco for Marsh LLC.

“Capital has become a little bit more difficult to get,” said Mark Anquillare, president and chief operating officer of data and analytics provider Verisk Inc. Those insurtechs that thrived on top-line growth must pay more attention to the bottom line and cashflows, he said, adding that growth for growth’s sake “is not going to be rewarded like it once was.”

Insurtech companies have also moved toward a more collaborative model with respect to incumbent insurers from the almost confrontational approach of five years ago.

“We’re past the point of inflated expectations, and now the reality is creeping in,” said Bill Pieroni, New York-based CEO of Acord, the standards body for the insurance industry. “We’re beginning to see insurtechs acknowledge the fact that maybe you need to know something about rules and regulation; maybe you need to understand rating and pricing and actuarial science.”

Mr. Pieroni added, though, that funding is still available and abundant. “Is there still plenty of capital and dry powder? Absolutely,” he said.

Others have also seen the change in approach.

“People have come to recognize and understand there is a complexity to the insurance mechanism. It doesn’t seem to be the same effort to completely disrupt, it’s more an opportunity to gain share and maybe partner with,” Mr. Anquillare said.

Mr. Inan said that, in general, technology will be used to solve problems in insurance and more broadly. “That hasn’t changed, and I don’t think it will go away,” he said. “Ten years from now there will be a great deal more technology layered into the insurance process.”

Those that do not adapt may be left behind, he said.

The change has brought fresh competition for talent, which is already an issue of concern in the insurance industry. Insurers will have to compete in a larger labor pool with other industries for expertise such as computer science graduates, something which will require a greater allocation of resources and effort, Mr. Pieroni said.

Technology can help companies and employees free up time that can be refocused on training opportunities for young people, Mr. Inan said. “More opportunity for folks like myself to mentor,” he said. “The more time we can give back to people will help create the capability for more innovation.”

Ultimately, technology may change the way insurance employees do their jobs.

“To me, the underwriter of the future is a data scientist,” said Bryan Davis, Chicago-based executive vice president and head of personal lines strategy and business development for Hub International Ltd.

Even as change accelerates, there will still be a human element to the business, Mr. Inan said. “The dynamic for a large complex client is really more than just placing insurance. I think that the advisory component will always be there as a human element,” he said.