"Worlds colliding" seems like an apt way to describe the meeting of the minds between insurers and Silicon Valley’s free-wheeling digiterati. But it’s been happening lately, big time.
Nowhere is this in more evidence than the recent Core Systems & InsurTech Fusion conference, held in South San Francisco, which brought out some of the industry’s most prominent disruptors. The event, hosted by the Silicon Valley Insurance Accelerator (SVIA), was intended to bring insurtech, core systems, and insurance innovators together. The verdict? Insurers have 'no choice' but to get on board.
In the opening keynote, Eugene Lee, vice president of Guidewire, called this new era in insurance the "engagement era," driven by “technical advancements and major shifts in customer expectations.” Core systems and insurtech have a key role in addressing those changes and calls for insurers to “more intelligently engage customers, employees, and partners,” he added.
Elsewhere, Ali Safavi of Plug and Play Ventures recently talked about the growing entrée of insurers into Silicon Valley in TechCrunch. The startup accelerator recently announced its second insurance cohort, comprising 24 new insurtechs.
“Insurance giants are flush with capital and are flooding to Silicon Valley to find the next startup to change the future of insurance,” he explains. This is being driven by the fact that “insurance is on the verge of a massive overhaul.” New technology initiatives such as “drones armed with high-tech sensors, IoT and big data analysis provide vast amounts of additional information to insurers. Technologies like AI and new distribution models streamline the way customers interact with their providers.”
True to the spirit of disruption, many of these new technology ventures have made their moves fulfilling needs the large established insurers have been overlooking. “Startups like Slice, which focuses on flexible policy offerings for the shared economy, or Stride Health, a new health insurance platform for the increased number of independent workers, are capitalizing on growing niche markets that were previously overlooked by insurance giants.”
Large insurers are sitting up and taking notes. Safavi says that within a few months’ time, 30 of the largest insurance companies have joined Plug and Play’s Insurtech program “for one-on-one access to today’s hottest insurance-focused startups, showing they are ready to innovate the industry.”
Of course, it should be noted that Silicon Valley is just as much a state of mind as it is a physical location in California. All across the world, companies are seeking to deploy technology to address business opportunities and problems in new ways. By all recent indications, insurance is becoming part of this movement. The spirit of Silicon Valley lives in Chicago, Boston, Berlin and Bangalore as much as it does in San Jose.