The Weekly Wrapup is an analysis of the week's insurance tech news from the editors of Digital Insurance.
With disruption reigning for venerable industries, insurance companies aren’t the only ones working hard to transform into digital enterprises. From a strategic level, carriers are well-aware – and prepared to invest – in a future state for their companies. But a major challenge many insurers face is luring the top-level digital talent to execute the strategies that the board room signs off on.
This pressure made up a significant thread of conversation between insurance CEOs at the Insurance Information Institute’s Property/Casualty Joint Industry Forum this week. Brian Duperreault, president & CEO of AIG, said the industry needed a new talent base that better understands new forms of risk. But the industry’s “boring” reputation, as well as geographic factors, make recruiting difficult, added EMC Insurance CEO Bruce Kelley. He noted that his company has more than 100 open tech positions at its Des Moines headquarters.
But EMC does have an ace up its sleeve. The company is an investor and mentor for companies in the Global Insurance Accelerator, an insurtech-nurturing program that just launched its fourth – and largest ever – cohort. EMC, its insurance carrier peers and civic leaders are in the midst of creating an energetic, vibrant hub for insurance technology from the ground up in Des Moines.
What EMC and the GIA have done matches up well with recommendations from J.D. Vance, an author and venture capitalist who works with the Rise of the Rest initiative to boost tech and digital innovation and development outside the traditional coastal hubs like Silicon Valley and Cambridge, Mass. Vance was eager to sign on with the organization, which was started by AOL founder Steve Case, because he felt that Silicon Valley had become too insular.
“I had a special interest in companies that were outside of the classic coastal tech scenes, because it occurred to me in talking to [others in Silicon Valley] that they weren’t looking outside the places they [already] lived and worked,” Vance said in remarks at the Silicon Slopes Summit in Salt Lake City this week. “There are places where investors weren’t looking as hard as they could be.”
While insurance has major presences in cities like New York and Chicago, many more notable companies are located outside Alpha-level world cities. Those companies are going to have to work a little harder to recruit. But the increased focus and interest in insurtech offers an opportunity for those areas to carve out a niche.
Vance says that building a vibrant startup community requires a few things:
- Network density and collegiality – a community of entrepreneurs and investors willing to support each other and realize that there is enough investment to go around.
- Support from civic leadership – companies should be ready to work with local government officials to create the space for digital entrepreneurs to grow.
- Local investment – with many insurers opening their own venture-capital arms, the industry can represent a beacon for innovative minds to thrive.
The Global Insurance Accelerator hits on all those key points, and it’s not the only one. A similar small-town accelerators is launching this year in Hartford, the economically struggling “insurance capital of the world.” Also, Northwestern Mutual signed on to a cross-industry program in its hometown of Milwaukee to support local insurtechs and other startups.
Vance adds that an important tool in luring tech talent is a vibrant community of other jobs that give top recruits security that even if the company they sign on closes, they will find a landing spot. Insurers’ corporate innovation and development options provide that security – and of course there is always the opportunity to acquire local insurtechs outright and bring their talent in that way.
February represents the third annual Insurance Careers Month, an industry-wide initiative pairing carriers and technology providers to boost the industry’s profile. It is the perfect time to begin talking about how carriers can support the community of insurtechs in order to attract more technologists to the sector.
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