No matter where you go these days, you can always find something to read about insurtech. In the insurance-industry specific press, the coverage is starting to reach Trumpian levels of overexposure, which makes it exceedingly difficult to filter out the noise. But there are still useful things to explore. 

What’s really different when you think and operate like an insurtech company? What would it take to turn your agency into an insurtech firm?

At its core, an insurtech company is a technology company attempting to apply software, process or technique to an aspect of the insurance industry and, in doing so, fundamentally changes the way that segment of the industry works. It’s a logical idea that’s been around since the idea of business. It’s simply made sexier with a dash of bravado and the sizzle of technology. In fact, disruptive change is often fueled more by the personality of the cast of characters than by seemingly magical new technology or secret-sauce inventions.

When targeting an industry that’s perceived as stale, you don’t have to burn a lot of research and development investment inventing truly innovative technologies. Technology in our industry is mostly a game of catching up and bolting on.

  • We can’t provide clients with access to their basic insurance documentation without manual effort? Run, run, run! Bolt on!
  • Clients can’t directly upload exposure information on 1,200 commercial buildings? Run, run, run! Bolt on!
  • Wait, a different client needs to upload the same type of information but for municipal buildings instead of commercial buildings? That other bolt-on doesn’t work! Run, run, run! Bolt, bolt, bolt!

What we ultimately end up with is a pretty gnarly looking Frankenstein of disjointed processes, systems and software. In most cases, only one or two people know how to deal with any given section of the monster. It’s likely not even a single person in the agency could trace the flow of all business through the beast.

Insurtech firms know this. They understand that, even though the industry is complex and even though we know how to navigate it better than they do, we are absolutely buried in a rat’s nest of individual and small-team processes. An insurtech approach isn’t just about adding sauce and sizzle. It’s about creating a holistic approach that can handle whatever processes, regulatory requirements, and strange trading partner rituals that are thrown at it. When the system is designed with complexity in mind, the manual processing requirements disappear. The margins go up, and the service gets better. That’s where they’ll win and we’ll go home looking confused. It’s not their software, their fancy logo or the rounded corners of the buttons on their website.

In fact, drop the entire idea of technology and software out of the equation, and the problem still exists. Has your agency defined the metrics and operational parameters for landing and servicing business across all divisions in a way that adds value to the insured and defines the experience of working with your firm in a way that makes it impossible to leave you?

Insurtech firms have. In fact, they start there. Then, they build the systems and software required to execute on the model. Sure, they may start in some obscure corner of the industry, but trust me when I say this: tech firms are built to scale up, and when they do, it happens overnight. Build, execute, iterate, scale. This wash-rinse-repeat approach has been proven over time and will never be successfully countered by run-run-run-bolt-bolt-bolt!

It’s a lot to think about, but we have to start somewhere and this is the core of the issue. The impending battle will be fought here. So think about it, captains of industry.

Gagnon is The Council’s CIO and president of Tiebeam Partners. christopher.gagnon@ciab.com