I am delighted to announce that Stephen Goldstein will be taking over the Thursday Insurtech slot from me. We now have 5 Authors, one for each day of the week covering a different domain within Fintech.
You can read his first post below.
Stephen epitomizes our mission at Daily Fintech, which is to create conversations that make things happen. We are delighted to welcome Stephen as one of our constellation of stars.
One reason why senior people give us their attention is that we connect the dots between Fin and Tech. We translate Fin to Tech and Tech to Fin. Stephen is equally comfortable in both worlds, as a quick glance at his LinkedIn profile will reveal. He has worked on the carrier side, so he knows how Insurance really works in practice and now he connects InsurTech startups with Insurance companies.
Daily Fintech translates Fin to Tech and Tech to Fin all across the globe because “bits don’t stop at borders”. Stephen fits that global mindset. Stephen used to live in Malaysia as well as Europe and has recently returned home to Los Angeles. So he brings an Asian, European and American perspective. Stephen has the experience and global mindset to cover InsurTech innovation wherever it comes from, whether from economies where most people have multiple insurance policies to economies where most people have yet to buy their first insurance policy.
FinTech is being driven by big agile companies as well as scrappy upstarts and the relationships between the two. Stephen’s experience spans both and in his daily work he connects these two very different worlds.
In his first post below, Stephen starts by introducing himself to the Daily Fintech community.
Stephen Goldstein in his own words
Hello Daily Fintech community. My name is Stephen Goldstein and it is nice to meet you all. Bernard and I have agreed for me to take over the Thursday weekly insurtech slot. I am extremely humbled to have the opportunity to share my thoughts on Insurtech and interact with such an experienced and educated community of professionals within the insurance, financial services and technology spaces.
As I am new to this site, I thought it would be good to start with an introduction. Normally, I would ask about you the first time we meet. However, since this is a blog, we will have to start with me 🙂
Background to Stephen Goldstein
Although new to Insurtech, I am not new to insurance and I have been a user of some of the insurtech innovations in my most recent professional roles.. I started in financial services in 2006 as a financial advisor, providing investments and insurance solutions to my clients. I served as the insurance and annuity expert for the team I worked with, surveying the landscape quarterly and determining which carriers and products we wanted to provide to our clients. In parallel to this, I would review all of our clients insurance holdings and have regular reviews with them, ensuring that they had adequate coverage for whatever priorities they wanted to protect.
Being a financial advisor was going ok…until 2008 when the financial crisis hit, and myself and many other financial advisors (along with our client’s money) got washed out. I decided that the retail side of the business was no longer for me, and I became a fixed, index and variable annuity internal wholesaler (guy on the phones) at Jackson National. At the time, Jackson was ranked around the 14th largest annuity company in the industry, however after the crisis, and right after I joined in 2009, Jackson climbed the ranks to 3rd in the space (and they are number 1 in Variable Annuity sales in 2016). Since their rise started around the time I joined, I’d like to hope I had something to do with it too.
Jackson is a wholly owned subsidiary of Prudential plc. While my initial plan at Jackson was to become an external wholesaler (guy out in the field). This was, however, until I heard about a global mobility program offered through Prudential, which enabled participants to have three rotations around Prudential plc’s Group. I was accepted to this program and had three exciting and different rotations. I won’t go into these in detail, but at a high level, they were:
1) Setting up an agency network for Prudential’s expansion into Eastern Europe
2) Working as an internal auditor to the Group’s various business. I did this role because I had always been a sales guy and one of my mentors told me that if I ever wanted to run a company, I needed to understand the risk management side of the business
3) Working as the head of strategy to the Chief Agency Officer of the Malaysian local business unit and then the relationship manager and head of sales for one of the bancassurance channels in the same country
It was a very exciting 8 years with the corporation. I left at the end of December 2016 to move back to the states and take a small break. This was, until, the opportunity with Pivot came up in February, which was my real first entrance into the insurtech space.
I think it’s worthwhile to mention, that before my time in financial services, I had a few entrepreneurial ventures such as a house cleaning service in college for the students, by the students. I learned early how to make entrepreneurial mistakes when I opened a soda/beer stand at the age of 8 on the 6th hole of my neighborhood golf course and blew it by offering a beer to a police officer playing golf….
By now, you must be thinking, ‘Why on earth is this guy writing all of this? This is supposed to be an insurtech blog, not a personal advertisement for the guy’.
The reason is this: As I mentioned, I am new to insurtech and new in the insurtech scene. I am not an expert in this space, nor will I proclaim to be one (at least not yet). I wouldn’t even qualify myself as an ‘expert’ in insurance. I do know a lot about it though, and have been involved in enough areas of the business to be able to ask reasonable questions to insurtechs to understand the value proposition they are bringing to customers, distributors or carriers (or help them to define this if they can’t describe it!). I have sold a life insurance policy to a couple and had to deliver the claim check to the widow when the husband passed on. I felt this was the real day that I felt the power/importance of insurance…
The reason I am giving you all this background is that this is the first blog I’ve written on Daily Fintech and I want to be upfront with you about my focus on writing and what you can expect from my articles. My views on this space still come with a heavy lens from the carrier side of the business, as that’s where I’ve just spent the last 10 years of my career.
Why Did I Get into insurtech?
Earlier this year, I read Thank You for Being Late. This is a great book and gives a lot of insight on what has happened over the past 50 years in relation to globalization, climate change and technology; and how these 3 areas are affecting our daily lives. Reading this book was a big wake up call to me. After spending 8 years in a traditional, corporate insurance company, I realized there were so much innovation happening around me, so fast, and I wanted to be a part of it. My first thought, was ‘I need to get a job in tech!’.
When the opportunity with Pivot came up, I thought to myself, ‘hey, here is an opportunity to get into the tech space, in a language I understand…insurance!’.
Over the past 7 months, I have had the tremendous opportunity to get on the ground floor very quickly and meet many amazing Founders, Influencers and Investors in the space. I have been following some great sites and particularly like the stuff coming out of Coverager, CB Insights and Denovo. I am learning something new every day, and finding out things that can be done in the insurance industry that I never thought possible. I look forward to making my contribution and interacting with all of you.
How do I view insurtech?
As I’ve been reading about insurtech and speaking with people who have been in the space for far longer than I have, I can illustrate my views on insurtech through the diagram below.
Well, I think it is. Insurance is an industry in which companies provide coverage for individuals (or businesses) for events that may happen to them sometime in the future. That is the fore of it.
Most of these ‘Existing’ companies have been providing coverage, in a traditional manner (through an agent, bank, financial advisor, etc) to these individuals and businesses, and have been around for a long time.
Guess what? They will continue to be around.
Why will they stick around?
Because ultimately, some people feel more comfortable buying something complicated like insurance through a live person that can explain it to them. For example, I just moved back to California, and I bought my auto, medical and renters insurance through agents, that represent the biggest companies. That was what I was personally more comfortable with. There are many others out there that feel the same and will still feel that way for years to come.
I put these these ‘Existing’ companies and the core insurtech solutions they need into the ‘existing stuff’ circle.
What are some of the solutions they need?
- Claim Management systems
- Better policy delivery services/platforms
- Lead Management tools
- Better customer experience apps/portals
- And the list goes on….
As I speak to insurance executives for large carriers in Asia, US, Europe and Africa, the same challenges and questions exist, irrespective of geography:
- How do I reach out to more customers?
- I need to update my legacy systems? How can I do this when we want to do other innovation activities?
- I have data sitting everywhere and don’t know how to bring it together
- Many of my back office processes are manual. How can I best automate this and where do I start?
Then we have ‘New’ companies and even new products that are going direct to the consumer, without the need of a traditional insurance carrier, agent, bank, etc. Think Lemonade, Slice, One Insurance, etc. These guys are saying, ‘Hey! The way the traditional guys have been doing it is not entirely right and I’m going to change it and offer my own insurance!’ I like these guys. I like what they are doing, and I think it is needed to give these insurers the wake up call they need.
The beautiful thing about the insurtech landscape right now, is there is space for both ‘New’ and ‘Existing’! For the ‘Existing’, there are millions upon millions of people that are insured by these companies. They will need innovation to ensure the existing coverage and experience for those customers is as good as possible. How many of you own policies from companies in the ‘existing’ bucket? I’m sure you want them around in 20-30 years when you need to claim, correct? And I’m also sure that you want the experience with them to be as good and smooth as possible too, correct?
And what about the insurance sales folks out there? I’m sure you expect your role to be around for the next 20-30 years, right? And you want the tools in place to make your sales process simpler to help increase your professionalism and business expansion opportunities, right?
Now, the folks that sit in the ‘New’ circle may be thinking, ‘Well, Stephen, don’t speak so fast, because in 20-30 years all those existing customers will have moved to us or companies like us!’ Let’s see. Insurance is a long term business and the reason these existing companies have been around so long is because they know how to manage risk through various economic cycles (and no, not just because they are stingy with claims as some start-ups are suggesting).
So, there will be a need and space for the ‘New’ and the ‘Existing’. And eventually, they will come together (and already are) to create the ‘Nexisting’ (This is the most creative play on words I could think of…sorry)
What is a ‘nexisting’ insurtech product/service?
- Using telematics and IoT to enhance pricing models for insurers to enhance their existing products (and/or offer new ones)
- Using data analytics to better profile an insurance company’s existing clients, offer them discounts/rebates for good behavior, cross-sell/up-sell opportunities, etc
- Using the blockchain to effectively store policy contracts for an insurance company to help with updating policy information, help with claims history/assessment and more
- Using AI in a call centre to help customers with navigating their questions on anything and everything that has to do with their policy
- And so much more….
The beautiful thing, is that there are opportunities and things already happening in all 3 of these areas!
This then means that an insurtech company must then decides how to:
1) define their market opportunity in general to see whether they want to play in the ‘New’, ‘Existing’ or ‘Nexisting’ space, then
2) how they will go to market, by either,
3) offering their services/products to a carrier and/or partnering with a carrier/reinsurer to build their product
For a carrier, the journey is slightly different:
1) What is their distribution strategy and how much do they want to differentiate from their face to face distribution? This can be a conundrum, especially for insurers in Europe and Asia who have predominantly relied on tied/face to face distribution for so long and can not expand to digital/online solutions in too big of a way due to risk of upsetting their core distribution channels
2) Once #1 is defined, then they need to identify what the priorities are. They will need to ask questions such as:
- Do we have legacy systems we need to update?
- Do we need to give our agents/customer better tools?
- Do we want to invest in new digital outreach?
3) Once the priorities are defined, then they will need to determine how they will go about it:
- Do we want to purchase a service/product from a insurtech provider?
- Do we want to build our own?
- Do we want to buy an insurtech company outright and bring them in house?
According to CB Insights, 51% of Fortune 500 investments into private tech companies have come from non-tech corporations in 2017 YTD, up from 29% in 2014. Why do we think this is the case? Are they scared of the market being disrupted? No Are they scared of being irrelevant and out of business? Maybe.
The one thing I know about my 10 years in insurance is that the big insurance companies have a lot of money, a lot of pride, and will not go down without a fight. For that reason, I am confident that insurtech will continue to operate in the three circles I define above for a long time to come. Though, I will admit, that the contents of those buckets are definitely going to change from time to time.
As I will only be writing to you weekly, I will leave the daily updates and happenings in this industry to the news business. Daily Fintech is in the insights business, not the news busiess. My aim is to write about things that are happening in this space, around the world, that I think are impactful, interesting and important. Sometimes I’ll focus on things that either organizations or start-ups should be thinking about when undergoing innovation initiatives and sometimes I’ll tap experts in the space for their views to publish on here.
I love hearing differing opinions too, so please do share yours if you do agree, do not agree, or have other ideas on things you want me to write about. I look forward to interacting with you more, learning more about this space and helping to make some impactful change along the way.