#ITC2017 – The Daily Fintech Review

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The networkers networked.  The start-ups hustled.  The investors swarmed.  The consultants consulted.  The incumbents searched.  And the rest, listened and learned. #ITC2017 was a great event, that brought over 3,500 Insurers, Reinsurers, Start-Ups, Investors, tech firms, consultants and more, from 48 countries together, to discuss Insurtech – anything and everything that has to do with it.  

I had three goals from ITC:

  1. Prospect for my business
  2. Learn about new trends
  3. Find good sound bites/themes to write a good story about the event

About 3 weeks prior to ITC, Bernard Lunn, CEO of Daily Fintech sent me an e-mail with some advice on preparing for an event:

Reporting from a conference/event

Here is what I have learned from doing a lot of them.

Sipping from a firehose is the hardest issue. It is hard to know what to focus on. I have found two techniques to help with this.

  • Mega themes and big issues. Have a few that you are looking out for eg Reinsurance As A Service, pricing Catastrophe Risk. Talk to anybody or attend any sessions that connect to those themes and issues.
  • Let it emerge. Soak it in. This is the opposite of the first. Be open to surprises and feeling the mood of an event.

Enjoy and remember one big lesson of the digital age – what happens in “Vegas lives on YouTube forever”.

With 22 meetings scheduled over two days, my desire to attend 12 of the talks/panel sessions and wanting to view all the start-ups in the expo hall, it looked like I was planning for this, let alone a firehouse.  

There have been a lot of good and interesting reviews of the event and I encourage you to read them to get differing perspectives from the event.  I have included links to some of the ones I have found at the end of this article.  Just by the sheer number of reviews, one can see the amount of buzz there is surrounding this event.

I am going to be critical in some areas and also offer some potential ideas for next year’s event. This in no way takes away from my overall feeling over the event – that it was absolutely amazing one.  A big shout out goes out to Jay, Caribou and their teams. The event was grand and had the feeling and buzz of something big.  There was a lot of substance (I thought there would be more hype to be honest).  It was just great to see so many people excited to talk about Insurance.

Here are my key takeaways from #ITC2017:

The excitement of the event was second to none.  In fact, Insurance almost seems cool now…but how long will this feeling last?

In the hype vs. substance debate, I would agree that there was a lot more substance on display than I thought there would be.  However, the hype was still there, just more so in people’s minds (i.e. the attitude towards Insurance/Insurtech).  If you went to an Insurance conference a 10 years ago (this would have been in the midst of the last financial crisis), almost everyone would be wearing ties and/or a full suit and the theme would be rather somber.  Not here.  I hardly saw a tie during my few days there. Not only that, but we also got to see the standard Silicon Valley start-up solid color shirts with company logo on display.  And the mood was vibrant.  People were excited.  I’ve never in my life seen so many people excited about Insurance and for them to actually feel genuinely cool being in the industry too (I feel that way too, so it’s OK).  

An interesting question (that I have not seen in any other written reviews) was posed in the pre-conference workshop hosted by Hannover Re and Sureify – ‘when will the burnout happen?’.  I found this to be one of the more provocative questions that I heard asked throughout the conference.  

There is an opportunity right now to implement tons of really interesting new solutions to the Insurance value chain.  Many of these solutions happen to be technology, which has helped to dub the term ‘Insurtech’.  I feel that, a bit, just like Fintech, because Insurance has now added a ‘tech’ to it, it feels cool to be in the Insurance business.

However, one day, these solutions will be considered ‘normal’ as it relates to the value chain, and that’s when I think the burn out will happen.  That’s when people who were here for the hype will move on to the next big hype/opportunity, and hopefully there will be some washout of the solutions (and people) that are not so good – allowing for the really good ones to really shine.  

Why such a focus on this?  Because the conference helped to remind everyone what we are here for…

We are here to find solutions, not build technology

I’m just going to come out and say that James Siminoff, CEO of Ring, was the WWE equivalent of a babyface at ITC2017.  His emotionally charged interview with Telisa Yancy from American Family, reminded me of why we are here.  His quote “Humans don’t love technology. They love solutions that make life better. Sometimes technology becomes that” has been mentioned many times so far.  And I couldn’t agree more.

Insurance is a business where we provide people with peace of mind, allowing them to know that there will be a monetary solution provided when they suffer a major loss/accident (or minor, depending on coverage purchased).  This loss/accident can either in the form of health, death or to some sort of property, and the solution is at a time when a person typically needs it most.  That is the core of our business.  

And because that is the core of our business, Insurance is REALLY important to the people who purchase/use it.  That’s why, there was such a focus on customer experience during the event (well, at least it was mentioned a bunch of times throughout the conference…)  

People that have been around the business for a while, or really understand this business, know this.  They know that technology is simply an enabler to improve the Insurance value chain, and that the fundamentals and principles of Insurance still need to be considered, in addition to, the new sources of information (i.e. data), available to them.  

What’s great, is that with some of these technology solutions, not only can we help our customers when they need it most, but we can also engage with them to help them prepare for the events when they need it most.

When we marry the two – fundamentals/principles of Insurance and technology together, then we can find solutions to improve what keeps being mentioned – customer experience.  

As mentioned in some of the other review articles, more incumbents were present than last year.  In my mind, this is important, as they can help teach some of the start-ups the fundamental and principles of Insurance, as well as the operational aspects of their business.  Start-ups, especially tech start-ups, are good at being nimble and offering solutions for incumbents, but they need to understand them first.  In this regard, I personally found that…

The industry ‘vets’ are not the traditional ‘vets’ you would expect

If you take a look at the speakers list for the conference, the majority are from start-ups. Yes, some of the more active Insurers/Reinsurers in the Insurtech space like AIG, AXA, Munich Re, XL Catlin, Chubb, Hanover Re and Allstate featured in some talks, but the list was dominated by start-ups.

‘The Insurance Company of the Future’, session, which featured Nick Martin, Fund Manager at Polar Capital, Steven Mendel, CEO of Bought by Many, Assaf Wand, CEO and Co-Founder of Hippo and Kyle Nakatsuji, founder and CEO of Clearcover was standing room only.

This is quite telling.  People attending the event wanted to hear from some of the new Insurance CEO’s on their take of how Insurance companies will look in the future…looking to them as the vets of the industry.

I was able to spend some time with Kyle and Assaf both individually.  If you take a look at their LinkedIn profiles, they only have a few years of pure ‘Insurance’ experience.  They have been able to, however, learn the principles of Insurance (Assaf through being around it with his father being a senior executive in the Insurance industry and Kyle helping start the Venture fund at American Family), and apply these principles along with technology, to build a proposition that is unique for customers for a variety of reasons.   

Talking to them, I felt as if I was talking to people that had been working in this business their whole life.  They really get Insurance.  It’s not about applying technology to the Insurance value chain, it’s about looking at the fundamentals of Insurance, seeing what customers need and what they don’t need, and then offering it to them, in a way that they would prefer to get it.  Technology is a primary helper in this, but it is not the main driver.

It’s actually quite simple if you start to look at it this way.

This is not to say that the incumbent C-suite that were there didn’t have something valuable to say.  They did.  The session by Benoît Claveranne, Group Chief Transformation Officer of AXA was one of the more informative ones that I attended.  I also heard and have read really good things about the session with Rob Schimek Executive Vice President and CEO, Commercial @ AIG, but unfortunately, I could not attend.  Benoît made a few very key points during his talk:

  1. When a start-up approaches an incumbent, they should make clear what they are looking for – to be invested in, bought out, or partnered with.  A lot of time is wasted on this during early engagement, and will help move the conversation along if it’s clear early on
  2. For start-ups – make a call after 1-2 meetings to see if the incumbent is serious about doing business.  Do they have a budget and a team to develop it?  If not, it may be time to move on to the next client.  

The point I am making here, is that there is a wealth of information from both start-ups and incumbents, and people on both sides of the fence that are looking at the fundamentals/principles first, and tech as an enabler.  The more that incumbents can understand what part of the value chain they are trying to solve for, and what sort of tech solutions are available to them, and start-ups can understand the fundamentals and principles of Insurance, as well as the value chain, then there will ultimately be better opportunities to improve the customer experience.  In my opinion, it’s not really about us vs. them, and…

Partnering is key

Last week, I wrote about the announcement between Snapsheet and Keybank to launch Snapsheet Transactions.  There was another partnership announcement this week between Everplans and RGAx.  RGAx will become the primary distributor of the Everplans platform to all U.S. life insurance carriers.  In my conversation with Co-CEO and Co-Founder of Everplans, Abby Schneiderman, we discussed how the Everplans platform is a complementary service to traditional insurance offerings and how it can benefit a customer to have all of their important documents and wishes in one place.  In the event of something happening to them, their beneficiary can use this tool as a roadmap to their loved one’s life and wishes ,minimizing the burden of searching everywhere for documents.  Referring to my second review point above, a good and practical solution for the customer.

These are just two examples of non Insurtech companies, partnering with ‘Insurtech or Incumbents’ to provide better, holistic solutions for customers.  In addition to this, we saw drones at the event, Google Maps, Card Tapp and someone told me that they could now do underwriting based on a swab of the cheek.  For a more traditional type of announcements that you would expect from this type of conference, Qover, made an announcement with Munich Re, one of the more active Reinsurers in the space.  (See an exclusive interview I had with them here)

Bottom line is, in addition to the point I make on industry veterans above, is that collaboration is key.  It doesn’t matter whether you are a Fintech, Insurtech, Insurance/Reinsurance incumbent or some other technology based solution – we need to continue to look at things from a customer Insurance value chain perspective – and ask ourselves, is this really beneficial for them or not?  Because ultimately…

It’s not all rosy, and there a few things we need to look out for…

While there were a lot of good things from the event, as highlighted above, there were a few things that I took note of that need to be addressed.  It’s easy, when surrounded by such a buzz of an event, to have blinders on to potentially negative/risky things out there.  Here is the list:

  • There is a lot of data available now, and it can be scary.   With telematics, wearables and IoT, Insurance companies, just like Google, Facebook and your smartphone, will now basically be able to know every thing about you.  If Insurance companies were just going to use this for targeted marketing, that is one thing.  However, and rightfully so, there is a lot of talk about how data can be used in the underwriting process and pricing products.  This really needs to be handled with care.  Insurance and Reinsurance is a business of risk management.  If carriers have more data and get an idea of the customers that are really hurting their overall book, there is more of a chance that they won’t want to underwrite that risk at all.  Regulation can help with this, however, will regulators be able to pick this up and understand it quick enough?  Right now, it is still early days, so there are still opportunities to understand this before it gets out of hand.  
  • Risk Management and Customer Data Protection are not being discussed enough. Sure, they got touched on, but I didn’t see this as the focal point of many discussions.  All solutions that are being implemented, need to have a proper assessment of risk attached to it (this relates to my point on fundamentals and principles of Insurance).  What are the different risks associated with implementing these solutions – from a customer, company and market risk standpoint?  How is customer data being protected with the increased use of wearables?  How are we ensuring data is not being used improperly?  The amount of regulators present at the event shows the openness to working together with incumbents and start-ups to understand solutions and how they ultimately impact customers.  They will need to continue to be proactive in collaborating and start-ups and incumbents will need to be proactive in engaging too.  I touched on this a few weeks ago.
  • Global sharing is just starting.  48 countries were in attendance, which meant that many cross-border conversations and potential opportunities for collaboration were happening.  This has so much value, and needs to continue happening.
  • What about the other 5 billion? During the session Redefining the Insurance Value Proposition, Peter Gross, Director of MicroEnsure Labs mentioned that ‘there are 5 billion low-income people in the world, who wake up every day exposed to massive risk’. Some of the solutions featured during the event may be costly to a customer – especially one that falls into this low-income category. This infographic shows the percentage of people with Microinsurance from parts of the world that have higher concentration of low-income earners.  For these people, Microinsurance may be all they can afford.  While some of these numbers are a bit outdated and they would have increased over the past few years, they would still not be as high as some of the Insurance penetration levels we see in some of the more developed markets like the US and UK.  How do we as an industry help these people to get access to Insurance/protection?  
  • It is apparent that some are just trying to cash in on the Insurtech gold rush.  I get it.  There is a lot of hype around Insurtech right now and a lot of money flowing into it.  So, you want to take an opportunity to get into it.  That’s fine, but at least be honest about it. The amount of people I spoke to that couldn’t explain to me in 30 seconds or less whether their solution was for a customer or carrier was not encouraging.  And from the other side, the amount of people who told me they were now an Insurtech innovation lab or incubator, just because had years of experience in Insurance was also not good.  Unfortunately, I only found this article after the event, but I think it is a really good future guide for events when speaking with start-ups.  And for those trying to advise or consult start-ups/incumbents – please articulate what you do, have done and what makes you different.   If you don’t know exactly what you can offer, just admit this, and say ‘we’ve been in the industry for a while and can better help start-ups to understand it’ or ‘we have a pretty cool technology that we think can be applied to Insurance, but are not sure yet how’. Being sincere and honest will take you a long way.

My two recommendations for next year’s event

It’s easy for me to write about how great the event was and also give some critical feedback of the event, but I also want to offer two ideas to the organizers for next year’s event:

     1) Let’s crowdsource the best ideas/learnings from the event

It is impossible to attend all the sessions, visit all the booths and still have time for networking.  There were so many good things to learn from the event, and everyone should have the chance to hear it all.  As review based scoring is how a lot of us shop nowadays, a crowdsourced review platform from all the attendees would help people to see content and/or share ideas that they may not have been able to get exposed to at the event.  This may also help to find the solutions that may be ‘real’ vs some of the ones that are ‘hype’.

     2) Workshops for start-ups/incumbents

This one may be a longer shot.  Lot’s of people at the event were looking for something – partners, funding, a story, etc.  For some, they had problems they were hoping to get solutions from.  For incumbents – maybe it is how to go about their digital strategy.  Or, how to best identify a start-up to work with.  For start-ups, maybe they needed that final piece to work through to make their solution a great one.  

Right now, the options for these folks is to go to a consulting company or an accelerator/incubator/innovation lab (both of which are OK options).  Since there are so many people here with such a wealth of knowledge, it would be great to see some opportunities for them to work through these problems during the conference itself.

Summary

I spoke with one of my friends in the UK who attended the event last year.  He explained that he felt like the only non-American at the event.  He did not attend this year, but we spoke a few days after the event.  I explained to him that the intro slide from Caribou showed that there were participants from 48 countries in attendance, and it certainly did not feel like an American only event.  There are things happening all around the world, and at much different paces than others (primarily due to regulation).  Sharing these ideas and best practices globally, will be the next evolution of Insurtech, allowing the customer to ultimately benefit from the innovative solutions happening around the world.  

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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Links to other reviews of ITC

Oliver Wyman, the presenting sponsors of the event, had a nice summary here and here one too

Insurance Journal had one of my more favorite ones

CB Insights has if you like more data than words

Some really good ones here and here and here and here and here and here and other nice ones here and here and here and here

A good contrast from last year

And some top quotes from the conference