Why is the insurance industry turning to startups?
From our perspective, it comes down to the level of variety and innovation that’s available. It’s pretty staggering. If I take Liberty Mutual as an example, each of our strategic business units has a kind of custom approach to leveraging tech startups and insurtech in their own ways that is very much tailored to the customers and the customer segments they address. To some extent, that mirrors and mimics how insurtech is. You have hundreds of various startups out there, each with a different play. That allows us to find the right match for the solution we’re looking for. We, along with all of our competitors, are always looking for competitive advantage, and insurtech offers some unique opportunities to learn and to leverage new ideas in a rapid way.

How is Liberty Mutual Benefits working with startups?
Our Liberty Mutual Benefits business unit offers a suite of employee benefits products and service, including disability, life, voluntary and absence management, along with individual life and annuities.

Liberty Mutual Benefits is one of the sponsors of Pulse@MassChallenge. It’s a Boston-based incubator that’s focused specifically on digital healthcare startups. We selected that, from the Liberty Mutual Benefits standpoint, because it’s tightly aligned with our strategic focus of helping companies manage disability and wellness. It was a unique opportunity to get access to and view many startups and then narrow it down to a couple that were a mutual match.

How do you decide which ones are the right match?
Ultimately you look for the idea. Some of these are later stage, so you look at if they’ve done any customer testing, and you look for a match with your strategy and their idea, the niche they’re trying to fill: does that meet something that’s an area that you’re focused on or trying to specifically address?

One of the startups we’re supporting is VIT, which looks to bring connected devices and analytics into the workplace. This is a product that helps to monitor back health. It’s a unique idea. Back injuries and back health are drivers of disability and workers comp claims. For us, it’s being able to partner with them and their technology and their thinking. They get access to a very large company, get some consulting, and can put their ideas into real practice. It is this mutually beneficial kind of relationship that’s key. It facilitates that learning process.

The other one is Gain Life. It’s a behavioral change company that uses digital therapeutics to help unlock the intrinsic motivation to provide personalized, evidence-based behavioral change. I find that a fascinating one. Many insurtech startups out there are geared at transactional types of things. Here’s one that’s getting at how you use technology to make behavioral changes, which can be some of the hardest things to unlock.

What do the startups gain from the process?
My impression is that the startups are eager to have a company like Liberty participate with them and bring customer and market insights to make their product more effective and rich. There is a lot of learning. The thing we want to be sensitive about is to bring that value add without ruining the magic that a startup has. Different startups will have different needs. A lot of time it is getting access to market, market insight and a better understanding of customers in a real-world and at-scale scenario. That’s one of the primary drivers for startups. Startups are small, and they have flexibility, and they’re able to quickly adapt and move to where the market is. The main thing that they need is a better and closer read on where the market is.

Is this process speeding things up?
It absolutely is. Of course, it comes down to management mindset. One of the things I’m most proud of is the Liberty Mutual Benefits team, which has a long, strong heritage in the markets in which we operate. Working with startups strengthens this idea of truly embracing the test-and-learn mindset, and not being afraid to test an idea, take it out to a dozen people, see what the reaction is and hear that, and not get wedded to it.