TLDR Don’t look now but the self-declared insurance disruptive force called InsurTech is maturing. There, I’ve said it.
And cyber crime issues need to become mainstream discussions. There, I’ve said that, too.
Here are some compelling InsurTech maturity indicators seen in the media this week:
- Publication of articles discussing more mainstream concerns for InsurTech players, entrants, e.g., Amit Choudary’s (Capgemini) comprehensive look at insurance financials for entrants, “Building a Financially Sustainable InsurTech Firm- Part 1” (Part 1?). When we start talking about accounting and not fancy tech innovation the grown ups have begun to have influence over those idealists.
- A mention of U.S. auto insurance giant, Geico, entering the usage based insurance (UBI) market, making, per Digital Insurance’s article Reversing Skepticism, Geico Launches User-base Insurance. Thanks to news blogger and watcher of insurance goings-on, Steven Applebaum. Geico and UBI- even if it’s a ‘keep up with the Joneses’ move it is a concession by Warren Buffet’s Berkshire Hathaway leadership that InsurTech and telematics has arrived.
- An excellent Linked In article by Adrian Jones commenting on why specializing in insurance is perhaps not the ideal path- Too Much Specialism: Why Insurance Innovation is Hard? When I first dived into the InsurTech environment the space was seemingly over-populated with specialists looking to innovate their respective niche of insurance. It was a significant enough effect that it prompted the birth of the Insurance Elephant (based on the fable of the Elephant and the Six Blind Men). Adrian’s well-supported contention is that general knowledge in insurance is not too bad.
- There are now multiple solid cadres of InsurTech/Fintech influencers such that their individual and collective industry outlooks can be solicited and published, as was well-curated by Digital Scouting and Robin Kiera this week here, clearly indicating that InsurTech has sufficient tenured folks to support a retrospective. And when you read the comments made by the twenty you will find many mainstream business observations. Huh- InsurTech mainstream?
- Formation and ‘coming out’ of InsurTech ‘groups’- the InsurTech Mafia, a group of 36 or so founders who have with the efforts of Ed Leon Klinger, CEO of Flock and others built an informal CEO-support group over the last few years and are now soliciting new members. They have sufficient start-up ‘chops’ having ‘walked the walk’ that they are willing to be out in the public, so to say (not so sure about the reference in the name-maybe a little cultural insensitivity). An additional and very early stages group of InsurTech advocates are the Engagement Network, as the LI site notes is comprised of persons who are “driven by a passion and commitment to help shaping the ongoing digital transformation.” In full disclosure the author is one of the founding members. When people have time enough to begin to discuss what they are doing then it seems they have been doing that doing long enough to call it a tenured doing.
Context Change- cyber
I must also comment this week on a topic that has effects for all who read the Daily Fintech- cyber security. This week found the announcement of a substantial data breach at a company that has built its reputation on being a solid financial and data company, Capital One. Exposure of records for one hundred million past and current customers over a several month period is without saying a terrible breach of trust to all of those involved, and a stark reminder to all who conduct business virtually and maintain virtual records- the largest, best financed companies can be victim to a least common denominator or poor extension of trust event.
As I composed the column I was advised of another cyber occurrence by my good colleague and smartest dang cyber guy I know, Mica Cooper, CEO of Aisus.com/InsurCrypt , that being a successful (unfortunately) phishing gambit targeting Ameritas Life . The breach occurred through employee emails, the company has worked to contact affected customer during the past several weeks, but direct cost to the company has occurred, customers are affected, and TRUST is an unwitting victim. As Mica recounted to me- it’s not an impossible problem to overcome; it’s motivation and culture:
“This is why IaaS (Insurance as a Service) is good, if properly set up. It can be embedded with a SIEM/SOC and have the quality/quantity review of multiple customer’s InfoSec teams. Companies are much more stringent on buying services than if they build it. For IaaS, the 1 10 100 rule of development applies, build it once and the cost is 1x, build it 10x, and it is cheaper, build it 100x and you can add all kinds of bells and whistles like security because of the scale.- Untracked access is a common issue. Admins are like god. They can do anything, see anything. take everything without oversight. We want to change that. “
So two directions this week- InsurTech is maturing, and Cyber issues are too. Both worth watching for very different reasons.
Patrick Kelahan is a CX, engineering & insurance professional, working with Insurers, Attorneys & Owners. He also serves the insurance and Fintech world as the ‘Insurance Elephant’.
I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.
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