What is InsurTech?InsurTech is deceivingly broad. Have a drone that can survey a roof for hail damage? InsurTech. Building algorithms to improve property damage data for reinsurance? InsurTech. An IoT device that will monitor water heaters for leaks? InsurTech. Device to plug into your car to check driving habits? InsurTech. I could go on and on, but the point is that any technology that enables, enhances, or aids the underwriting, selling, processing, or management of insurance or reinsurance falls under the InsurTech umbrella. The broad umbrella of InsurTech has only been exacerbated recently by the investment in the space by Venture Capitalists. InsurTech is the hot buzzword for investment right now, so people looking to get investment money are finding ways to associate themselves with the space.
Any technology that enables, enhances, or aids the underwriting, selling, processing, or management of insurance or reinsurance falls under the InsurTech umbrella.
Where can InsurTech make an impact?Because InsurTech is so broad, its impact can be near limitless. 5 years from now, we’ll all know where the biggest impacts were made in InsurTech, and we’ll sit around and say that we knew what would work or what wouldn’t. The truth, though, is that nobody knows right now. There are some obvious areas ripe for change. Personal insurance has proven that people are willing to do their own shopping to save some money. In a commoditized segment, technology can bring the fastest hits.
At Talage, we are focused on Small Business Insurance because we think that’s the area that agents need the most help with. The economics of writing a $500 policy just doesn't pencil out for most agencies, so they look upmarket. And that's the right move. The problem is that up to 80% of the businesses in this country fall into the small business segment. That's a lot to leave on the table, and a huge opportunity to ignore.
There are other tools coming, too. If you are an agency focused on bigger accounts, you can automate and streamline the application process with a company like Indio. If you are, or work with, a company focused on contracts with 1099 workers look to companies like Bunker to help with the process.
Is InsurTech a tool or a threat?It depends. Technology is a funny thing. When we look back on the impact of technology in other industries, the people who have embraced technology, or at least the right technologies, have flourished, while others have fallen victim to the automation and efficiencies. Now, we are not proposing that blind adoption of technology is the cure-all either. But, you cannot dismiss technology either. Blockbuster is perhaps the most famous example. In 2000, they had an opportunity to partner with a fledgling company called Netflix. They laughed at the proposal because they believed their customers enjoyed coming in to the retail locations for movies and enjoyed talking to their cashiers while buying their candy and popcorn. Well, Netflix proved that what we really wanted was to sit on the couch in our sweatpants and watch 9 straight hours of Stranger Things (don't worry, no spoilers here).
Do your customers like coming in to talk with your people and eat candyIt’s important to understand what your real value is and focus there. Let technology help. What is the value of an insurance agent? And not what you think the value is - it's what your customers think the value is. If you're an agent, it’s time to take a hard look at your agency. Do your customers like coming in to talk with your people and eat candy from a glass bowl, or are they just looking for a policy? We’re betting that it depends on the policy. Small workers comp policy? Just give them a policy. For large Medical Malpractice insurance policies, or a property policy covering millions of dollars worth of real estate in a coastal region? Your personal time and expertise is really important.
from a glass bowl, or are they just looking for a policy?