In more traditional-minded insurance circles, concerns have been raised about the emergence of insurance technology (insurtech)-focused startups. These range from loss of jobs due to automation to more alarmist claims that insurtech could kill off entire segments of the insurance industry.
Amidst the fears, one insurtech industry leader says that insurers, instead of rejecting insurtech, should instead embrace it and realise that it isn’t as alien as they think it is.
Ted Devine, chief executive officer of online insurance brokerage Insureon, aims to dispel the myths surrounding terms such as “insurtech” and “disruption”.
“Let’s start by defining Insurtech,” Devine tells Insurance Business. “Insurtech is any new, innovative technology or idea that’s set to improve insurance delivery across a business system. Simple as that. What many don’t realize is that Insurtech is happening within the traditional insurance channels.”
Traditional insurance carriers harmonising with insurtechs is a two-fold process, Devine says. First, traditional players should look at the startups to see what they’re doing right, and adopt it.
“Enhancements to the user experience, a keen focus on digital marketing – insurers should apply these technology-based improvements to their own delivery models where applicable,” he says.
Second, they should partner up with the newcomers to get ahead of the innovation. His advice: “Determine what niche markets you are overlooking and figure out who can help you reach them.”
Devine believes that insurtechs and traditional intermediaries should work together for the greater benefit of the industry by increasing innovation. Instead of disrupting and preventing agents and brokers from doing their jobs, insurtech should enable them to work more efficiently.
Using his own company as an example, he says: “At Insureon, we’re not providing businesses an alternative to traditional carriers – we’re simply making it easier to connect small business owners with the right (and most affordable) policies to protect their companies.”
Many startups inside and outside the insurance industry love using the term “disruption”, selling it as something revolutionary that will entirely reshape the playing field. On the other hand, Devine actually dislikes the term, considering the “disruptor” tag as something negative.
“At Insureon, we don’t like that descriptor,” he says. “We think it’s disrespectful to the industry.
“I don’t believe traditional agents or brokers should fear us. This is why we hate the term ‘disruptor’ when people describe us. Agents and brokers will be the dominant channel to deliver small commercial insurance for years and years.”
He also seeks to temper the expectations of both traditional carriers and startups.
“While the impact of Insurtech will be huge, it’s not going to ‘blow up’ the insurance industry, as the term ‘disruption’ implies. The insurance industry doesn’t need to be completely overhauled; it simply needs to embrace the improvements that technology can provide.”
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