Insurtech: The Clash of Cultures
Updated: 2 days ago
I recently saw an interesting comment that someone made, "Some insurance companies are over 300 years old, whilst some Insurtech start-ups are less than 300 days old. They can be strange bedfellows!"
Getting two entities to dance together to the beat of the same drum can be the hardest thing in the world, due to the difference in business culture, the urgency involved, change management strategies, budgets etc. Insurer’s balance sheets are capital intensive, often stacked full of layers of management that can be removed from the end customer. Insurtech start-ups are typically lean, struggle with cash flow, and the founders have to know a lot about the value proposition involved to extract the first dollar of revenue from the first customer.
In my working life, I have been involved in a number of business start-ups, often in the role of being an “intrapreneur” (a manager within a company who promotes innovative product development and marketing according to Wikipedia). In my case it was working within a large conglomerate on new things and breaking new ground. It can be tough. I remember being sent to India 25 years ago. The only instructions from my boss were, “see what you can do”. The Life insurance company we set up all those years ago is now India’s second largest and it is comforting to see that some of the staff I recruited and the product names are still the same.
Insurance is a strange industry. Given the nature of cash flow, risk management and customer experience, it often appears that some insurance companies are asleep at the wheel, remaining stubbornly stagnant, doing nothing in the face of change. Underwriting losses in one year appear to be easily fixed by moving premiums up in following years. The way insurance is sold, serviced and managed can appear to be very forgiving. We know a lot of improvement work is being done, but it is not always apparent to the customer.
Insurtech disruption and innovation is all about not standing still. It’s often about making bold decisions, taking risks and learning by the seat of your pants.
The intersection of these large corporates and the world of start-ups is interesting to be involved with. There are some really clever people out there, prepared to collaborate in ways we could never think possible. Historically, large insurers always sought to do things themselves, right through the value chain. How the world has changed.
At BAIS insurance technology, we have been having lots of discussions with new and seasoned players in the insurance industry and have learnt more about what is driving both insurtechs and insurers. We are enjoying working with new and prospective dance partners to come up with different ways of doing things that will benefit the industry and its customers. In the process, it has been reassuring to hear that the tools and solutions BAIS has remain relevant and of value.