Insurers Must Seek Collaboration with Insurtech Startups
The insurtech space -- the growing number of startup technology companies looking to bring latest-generation technology innovations to the insurance innovation -- is booming. The unlikely marriage between venerable insurance institutions and Silicon Valley's next-generation approach is paying dividends, experts said in a panel discussion at the startup accelerator Plug & Play Tech Center.
Insurtech companies are standing out for their flexibility, says Robert Mozeika, executive for innovation strategy for Munich Re Silicon Valley. has been based in the Bay Area for two years, and says he's "surprised, but not shocked" about how quickly insurtech has come to the forefront.
At the same time, he notes, "the startups aren't always going to give you the solutions on a silver platter."
"You have to collaborate with them -- they are learning about the insurance industry and are willing to pivot," Mozeika explains. "It's about quickly getting to what is the value: Is this idea really going to swing our loss ratio at the end of the day?"
Jacob Rothfuss, head of commercial property, liability, and auto lines for Farmers Insurance agreed with his fellow panelist. He adds that insurers also have to learn how to talk with startups. Insurers should also understand the fast-fail approach common in Silicon Valley and begin to adopt it themselves -- there isn't always a lot of time to make a decision.
"Carries have to be very disciplined in the approach you take around insurtech in particular," Rothfuss says. "Know what you're trying to solve for and seek those firms. You have to decide quickly whether it's something you want to move forward with or isn't for you right now."
From Farmers' perspective, Rothfuss says, the company is looking for innovative solutions to help mitigate losses and improve the claims experience. Panelists all recommended identifying leaders within the insurance organization who are willing to be a champion for new technology options, and be ready to take action quickly.
"There's not a shortage of ideas, but some of our organizations are very large, and my job is to find a champion in this global company that will be the best partner for [a startup]," Mozeika explains.
Tim Attia of Slice Labs, representing the startup voice on the panel, said that it "does take a lot of energy" to find the right partner. That's what makes organizations like Plug & Play valuable, he adds: "From a startup perspective being part of the ecosystem is really important. The ability to have access to a lot of global carriers is critical."