Focus on the Customer for the right Insurtech strategy

Connection-01-758x345.pngEarlier this week, I posted the picture below to my LinkedIn account, with the caption:

I don’t miss being in either of these roles from my former corporate life. 👇🏼

Note to #startups out there: As your company is building to scale, please ensure #culture is at the top of your mind so you don’t fall into this trap.


Since posting that, I have been pondering on what culture means for our industry and why it is important.  

Over the last few months, I have written two guides:

An Insurtech start-up’s guide to navigating an Insurance carrier, and

An Insurance carrier’s guide to working with an Insurtech start-up

Both of these guides focused on ways for both start-ups and incumbents to better work together.  

The one thing specifically missing from both of these guides (though it was the undertone of each of them), is the cultural differences between both start-ups and incumbents.  

Finding better ways to work each other is important.  That’s Step 1 of the equation.  Step 2 is finding out how both sides can take whatever they are doing to ultimately give the customer/policyholder better products and/or experience.  

This week, I take a look at:

  • What culture means
  • What cultural barriers exist in Insurance as it relates to innovation
  • Why the focus always needs to be on the customer  

What culture means

According to Merriam-Webster’s, culture is defined as:

Screen Shot 2018-02-27 at 2.46.45 PM

When it comes to a corporation’s culture (whether they be a start-up or big corporation), it comes down to two things – what are the beliefs/values of that company and how does that drive it’s behaviors?

For most companies, senior management will set the vision and mission.  These are the values/beliefs that a company has and in effect, set the stage for the culture that is to be practiced within the company.  

For a big company that has been around for a long time (i.e. most Incumbent Insurance carriers), changing culture is not easy.  

Many carriers right now are feeling the heat of the Insurtech movement and want to become more innovative.  They want to have more ‘innovation’ within their company.

They want to build a more ‘innovative culture’ focused on ‘customer engagement’ within their organizations.

They are doing this by partnering with start-ups, setting up innovation labs, establishing new corporate venture funds, etc.

Does this mean that the company has changed its culture to an ‘innovative’ one or that they have improved their ‘customer experience’?  Not necessarily.

What cultural barriers exist in Insurance as it relates to innovation?

By nature, most Insurance companies are risk averse and do not want to take excess risk if they do not need to.  Additionally, most have annual profit and revenue targets that they need to meet on behalf of their shareholders.  

Frankly speaking, these two factors drive a lot of the culture within Insurance organizations.  

Screen Shot 2018-02-28 at 9.33.25 AM

The infographic above is from a recent Insurance Executive survey done by Insurance Nexus.   Due to the red-tape and bureaucracy that exists in many Insurance organizations, as well as the risk averse nature, they may want to undergo innovation initiatives, but their current culture and hierarchical structure prevents them from doing so.

Many carriers are tackling this by setting up new initiatives in a sandbox/pilot environment before scaling.  They are investing in innovation labs and/or in-house accelerators that lets them build and test new ideas with minimal risk.  

My advice to these firms – keep doing it, but make sure these are relevant and linked to the business.  Don’t just set one up because everyone else is setting one up.  Set it up with a purpose; one that is there to drive change in your offerings and interactions with your customers which will ultimately result in a cultural shift in the organization.  

Insurtech helps with this.  The culture of start-ups is fast, forward-thinking and nimble. Effectively, the antithesis of our industry.  

Both can learn from each other.  Insurance carriers can learn from start-ups how to best set up a framework within their organization that allows them to try new initiatives.  

Start-ups can learn from the risk averse nature of carriers and be more careful in how they are proposing and implementing new solutions.  

Meaningful collaborations can help drive initiatives forward and both sides need to recognize the cultural gaps and how they can work better together in spite of this.

As mentioned in the intro, this is Step 1 of the equation.  Finding better ways to work together.

Step 2 is taking that collaboration and building something meaningful for the customer.

Why the focus always needs to be on the customer

I listened to a webinar recently on claims.  One of the speakers is from the P&C industry and was talking about how with smart technology for homes, some claims will be removed completely and some will be mitigated.  In this case, the technology may be able to notify the Insurance company and/or authorities if something is wrong with the house to immediately take action or notify the customers to intervene themselves.

He then went on to describe that this will change the way that customers interact with their carriers, that they will look at the carrier as a ‘team’ vs. a ‘vendor’ and even as far as to say that carriers could help policyholders not only with repairs when they need it, but also upgrades to their home (not in the event of a claim), because the carrier ‘team’ will have the capabilities to do so.  

I was nodding my head in agreement as I listened until the last part.  

I thought to myself, ‘why would a customer want to use an Insurance carrier for upgrades?  That’s not what an Insurance carrier does.  

This is an example of Insurance carriers trying to shift their strategy (and subsequently their culture) to one of just collecting premium and paying claims, to one that helps with prevention and mitigation as well.  

I am fully onboard with this type of ecosystem concept, but only if it is actually relevant to what the client wants.  

An article posted on Insurance Thought Leadership this week entitled ‘Have Insurers Lost Track of Purpose’ by Chris Burand affectionately states, ‘As a reminder to all Insurance company people, the world does not need you if there are no claims. This is your purpose, your reason for existing.’  


A friend of mine recently shared this article which describes the one question that Steve Jobs built Apple on.  ‘Why should I care?’.  This is a good reminder of the question anyone reading this article should be asking themselves if they are involved in this space – Why should my customer care about what I am doing?

In the analog days of Insurance, having a mission of ‘helping customers to manage risk’ or ‘taking care of them in time of need’ or ‘giving world class customer service’ were OK when customer expectations from Insurance companies was to pay a claim when they had some unfortunate event.  

However, in today’s digital economy, expectations are higher.  It’s not just about providing a good Insurance product and customer experience, but having policies that are customized, on-demand and specific to the daily risks that I face.  Insurance companies also need to step-up to help with prevention and mitigation as well.  

Insurtech helps with this.  However, at the moment, it feels that everyone is so caught up in the movement, that they are forgetting the one person that matters most; the customer.   

If we start thinking as an industry why our customers should care about the Insurtech initiatives that we are undergoing, that will be a cultural change in it of itself.  One that all parties will benefit from.

Image Source

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.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.


  1. Two points…

    Research published today by the UK’s Institute of Business Ethics found that across UK firms, the vast majority of culture indicators used were inwards looking (such as employee survey data). Only a very small percentage used customer facing indicators of culture. I suspect that insurers are no better than a typical UK firm, and probably worse.

    A danger for new and incumbent insurers is to think that data and analytics takes them closer to customers, and so makes them customer centric. That’s mistaking proximity for intimacy. Your culture, as evidenced by the outcomes it generates for customers, can help build that intimacy. That’s not a tech thing; it’s a mindset thing.

    • Duncan,
      Thanks for the insightful comments. I fully agree with your points.

      Many carriers are saying they want to use data and analytics for customer engagement. Part of me feels that if this engagement that they are trying to achieve is actually moreso in their best interest (how do I cross-sell/up-sell the client more or make them more affectionate towards the brand). If they start thinking about what’s in the client’s best interest and what do they actually care about, then this will help in driving a more cohesive, meaningful strategy.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.