New Year Reflection


Being the first year I’m home for the holidays in 9 years, I am taking time out this week to spend some more time with my family.  Hence, I am recycling a post from earlier this year.

Looking back on the articles I have written and trying to figure out which one to use, I decided on the first one I wrote for Daily Fintech.  That article was my introduction to the site and gave a background on myself and my high level views on Insurtech.

In order to know where we want to go, we have to know where we started.  As I am reflecting on 2017 and preparing for my own 2018 business (and personal) plans, this article was a good reminder to me of how I initially viewed this ‘Insurtech’ space and also how I hope to contribute to the wider ecosystem through this weekly writing.

I sincerely hope you’ve enjoyed reading my articles as much as I’ve enjoyed writing them.  Your continued feedback, comments and shares of these articles keeps me equally engaged and I thank you all for that.

I’d also like to wish you all a very Happy and Healthy New Year!  As we are all busy in our day-to-day lives, make sure to take time out to focus on things outside of work like family, friends, nature and hobbies.

A good friend once told me ‘work is work, but family is family’.   It took me almost 10 years to fully understand what that meant, but now I am very clear to give focus to both.  I encourage all to do the same 🙂

Stay tuned for next week’s article, ‘An Insurance carrier’s guide to working with an Insurtech start-up.’  This will be part 2 of my post a few week’s ago, An Insurtech start-ups guide to navigating an Insurance carrier.


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.


Simple, right?

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?

  1. Claim Management systems
  2. Better policy delivery services/platforms
  3. Lead Management tools
  4. Better customer experience apps/portals
  5. 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 LemonadeSliceOne 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 from 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 business. 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.

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Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

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