Novarica’s weekly Insurer Virtual Town Halls are back after a two-week break. We look forward to once again delivering frequent and in-depth discussions on a wide range of insurance topics surrounding emerging technology, the planning and budgeting cycle, and how the pandemic is affecting the insurance industry.
We kicked off our return with a review of our recent InsureTech for Insurers: 250 Startup Profiles report. I was joined by Novarica panelists and report authors Jeff Goldberg, Tom Benton, and Stephanie Dalwin, who outlined their report and spoke about how the pandemic has impacted the startup market.
Jeff began the discussion by reflecting on the fact that the InsureTech market is still seeing growth. Insurers may have paused efforts early in the pandemic, but there is now a resurgence of partnering with vendors who offer capabilities that carriers need to survive. Digital experiences are no longer nice-to-haves, and insurers trying to eliminate manual or partially digital processes may not have the time to hire in-house teams to build out digital strategies and tools. Companies that are helping carriers move forward in these areas are providing a critical service.
Tom Benton added that in addition to time constraints, emerging technology might be getting too complicated for insurers. Many insurers, especially smaller ones, need to hire vendors because they need experts to stay relevant in the digital market. Startups specifically focused on AI are educating insurers on how best to use the data they have and aggregating disparate sources of data that insurers may not have considered using underwriting processes. For example, some life insurers have reported using unemployment data to identify locations where life insurance policies may lapse due to missed premium payment.
Stephanie Dalwin described that the life side of the industry is feeling these effects even more so. The pandemic is forcing life insurers are to grow online sales, look into fluidless underwriting capabilities, and provide digital claims processes for policyholders. The capabilities were prevalent on the PC side before the pandemic; the life side is now building them out through vendor partnerships and licensing.
The discussion then focused on how Novarica organized the InsureTech market into four groups: Analytics Arms Dealers, Beneficial Bots, Creative Carriers, and Digital Distributors. These groups are important because insurers must understand who they are dealing with. Some startups may be direct competitors, while others are potential partners offering competitive advantages. Startups can also help insurers offer new products, such as ones that focus on usage-based insurance or the gig economy, where there is a mix of commercial and personal liability. Cyber insurance is one product that startups have focused on—using AI to bridge the historical data gap and make the risk easier to underwrite.
This week, our Virtual Town Hall will focus on the question: What are agents and brokers thinking now? If you haven’t already, register here.
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