Insurtechs' role can be making data less overwhelming for insurers
Though data mastery is a key selling point for insurtechs building partnerships with carriers, new entrants need to reveal the value of data to incumbents, as many already have a surplus of raw information to analyze.
That was one of the conclusions from a panel discussion at Insurtech Connect in Las Vegas, discussing how startups and carriers can work together most efficiently to spur technological advancement.
“I tell startups to apply analytics, not to just show companies data and say, ‘See, there is value there,’” said Martha Notaras, partner at XL Innovate.
Notaras also advises startups to have insurance companies pay for proof of concepts, noting that carriers already deploy resources when launching pilots to begin with.
“Startups have to pitch something so compelling that [carriers] will push something off their desk to develop it,” said Notaras, adding that depending on the insurtechs’ point of entry, ideas could get lost in the shuffle. This places greater emphasis on selling a product idea to the right person.
In a separate session, panelists acknowledged that getting in the door can be an area of frustration for startups dealing with insurance companies.
To combat this, AmTrust Financial Services has created an innovation group within its company to keep newcomers from guessing what business unit to contact, according to Christopher Longo, chief operating officer of the commercial insurer.
Meanwhile, Zurich North America advises startups to make clear what they can offer the company, says Girish Rao, the carrier’s AVP of IT. The software or platform being deployed must also live within the larger ecosystem of the carrier.
“Note that a startup could also be proposing something for claims that is a better fit in distribution,” Rao added.
To that point, Sharon Ashton, SVP of commercial automobile and underwriting platform manager at Chubb Insurance, continues, “If you come in through the operations door, pitch products that will help us be more efficient in the back office. In underwriting, understand profitability matters most. So products should help us price accounts better or prevent losses.”
Finally, panelists say carriers’ delayed timelines in testing and developing pilots is another issue for startups to cope with.
“We put a lot of pressure on proof of concepts,” said Longo, conceding that some can be too expensive to commit to. “Proof of concepts should build value up, not have the organization take on much risk.”
Just as important as failing fast is documenting results of each pilot, says Rao.
“A great solution may come to your table. The time may not be right, but it could be at a future state.”