In April, startup accelerator Plug and Play Tech Center announced its plans to make insurance its eighth innovation focus area. Previous programs have included brand & retail, fintech and Internet of Things, among others. A ninth startup program, mobility relating to auto insurance, is also set to launch in the future, the company says.
Later this year, 25 insurtech startups will partake in a 12-week mentorship program, culminating in Plug and Play’s quarterly competition event, EXPO, on Dec. 14. As of last week, Plug and Play has begun accepting startup applications.
Ali Safavi, director of Plug and Play Insurance, spoke with INN about Plug and Play’s new initiative, tech trends in insurance and the impact startup technologies will have on the industry.
INN: Describe the timeline of the Plug and Play Insurance program
AS: Insurance is the fastest growing program we’ve had. It launched on May 26 and is up to 11 partners within the industry, including Munich Re, Farmers, USAA and StateFarm. USAA was a part of our fintech accelerator program while StateFarm and Munich Re were a part of IoT. One or two additional insurance partners will be announced soon. We want to build on our relationship with venture capitalists and press and help startups disrupt the market and industry.
INN: What do you make of current technology trends in the industry?
AS: I love statistics about how investments in insurtech have increased. It’s mainly in startups and one thing I’m seeing is the solution for insurance can be brought over from other industries. User experience, fintech, security, IoT and data collection have been around in other spaces. They just have to be brought over. Insurance companies are not just competing with other insurers; they compete with other user experiences. What’s the latest app trend or design for apps? They are always adapting to millennials.
INN: What does the application process look like for prospective startups?
AS: When we open up applications there are a few ways we connect. One is startups upload their contact info and site on our website and we have sources look into them. Two, we approach them. Or three, they are introduced to us by our corporate partners. Overall, we look at 800 to 1,000 startups, knock the list down to the top 100 we are excited about and then send the list to our partners. They then choose the top 30 to 50 and later decide on the top 25 that enter the program. At our Expo on Dec. 14, startups meet with insurers, brokers and VCs in one-on-one sessions. If it peaks their interest, they follow up with the startup.
INN: What technology areas are startups tapping into more frequently than others?
AS: The biggest one I’m seeing in insurance is distribution models. It could be anything from helping agents or replacing agents. Then there’s user experience, data collection and analysis for risk assessment.
INN: How important was it to partner with insurance companies like USAA and Munich Re on this initiative?
AS: A lot because we believe they are the best experts in the market. When you have them on board, startups can then talk to them and they mature much faster. Speaking to ten insurance companies compared to one makes a huge difference in the way startups pitch. There is a way higher chance of success.
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