InsureTech startups continue to attract the industry’s attention, bringing with them unprecedented access to emerging technology. The technology itself is exciting, but a huge part of what startups can offer insurers is how to actually use that tech.
Positioning matters. Novarica recently facilitated a town hall for our InsureTech Community where we discussed emerging technology trends and adoption, including the importance of proper positioning.
Startups should be positioning their platforms to insurers using a combination of the following four perspectives:
- Product: A product-focused approach is common among platform vendors and emerging core systems. This type of approach makes sense where minimal market education is required, especially for platforms like claims or product development. Insurers are likely to have some degree of familiarity with these systems and how they fit in with an existing tech stack.
- Use case: Defined use cases create a story around what exactly a startup is helping an insurer solve for. Use cases are especially important for technologies that have wide-ranging application, like artificial intelligence (AI) or chatbots. As examples, startups may carve out use cases like automating underwriting decisions for simple products or digital first notice of loss.
- Value: All solutions target pain points, solve problems, or create opportunities. In these cases, metrics can help insurers understand how and where to apply the solution. Improving loss ratios or increasing profitability are examples of such metrics. Many vendors, even large incumbents, fail to talk about how their system will have specific value creation for the client, but that’s key to positioning for real business need.
- Technology: Many insurers are exploring multiple applications of technologies, whether speculative like blockchain or established like AI and robotic process automation. Technology-driven projects often land with an innovation team, which can have a mixed success. Some innovation teams are able to find an application in a business unit, but often they simply don’t have the budget to take a project beyond a pilot.
Startups provide access to technical expertise that might not otherwise be available to an insurer. But technology adoption for the sake of technology adoption is not an effective business strategy and rarely leads to a pivot into the ongoing operational budget. The technologies that are emerging today will soon become established, and what’s most important is platform positioning.
Novarica hosts monthly interactive town halls for startups to discuss challenges and opportunities in the insurance industry. We hope to see you at our next event on February 17 at 3 PM ET.
Don’t hesitate to reach out to me at [email protected] or Stephanie Dalwin at [email protected] if you’re interested in learning about our InsureTech Community or how Novarica works with startup vendors.
Add new comment