For Dale Smith (pictured) – JAVLN’s chief executive who co-chairs InsurTechNZ alongside Tower Insurance CEO Blair Turnbull – the fact that investors the world over are pouring large sums into insurtech is a positive sign for the emerging sector.
“It’s a really exciting time,” said Smith when he recently sat down with Insurance Business. “Globally, there’s still record amounts of money being invested in insurtech. And we’re seeing that in NZ... there’s a huge amount of interest, which is really exciting. There’s a massive opportunity for start-ups and insurtechs.”
According to the Gallagher Re Global InsurTech Report for Q1 2022, the first quarter of the year generated US$2.2 billion in insurtech investments worldwide. In Q4 2021, the figure was a record-breaking US$5.3 billion.
In the January-March period, it was noted that there were a total of 143 deals, 106 of which involved P&C-related (property and casualty) insurtechs while the remaining 37 were investments into L&H-oriented (life and health) firms. New Zealand was among the 31 countries that participated in insurtech investment in Q1.
More broadly, the NZ insurance market is currently undergoing widespread reforms. The changes, said Smith, are providing opportunities to insurtechs.
He highlighted: “Technology is an enabler, and insurtechs typically start from solving issues, problems. And [issues related to] regulation, compliance, or claims, technology helps solve all those. So, that’s why I think we’re seeing a real wave of investment, because technology can help solve lots of problems.
“If you just focus in on the reforms and the compliance side, technology has a capability of helping make those processes and compliance requirements easier. So, to summarise, these changes are a huge opportunity for technology.”
So, what is the role being played by InsurTechNZ, which currently has nearly 30 company members?
Run by executive director Paul O’Leary, the peak body is an offshoot association whose former life was that of a working group within FinTechNZ. Goals of the standalone group include creating an environment for collaboration.
Lifting the lid on the separation, Smith told Insurance Business: “We’ve now established ourselves as a separate chapter underneath NZTech. We are entirely focussed on growing the ecosystem for insurtech in NZ, and we’re getting great interest. We’ve got some fantastic members coming onboard.
“Obviously, it’s been a little bit harder with COVID and not being able to have a lot of facetime with people, but that’s all changing now. Our last in-person event was really well-attended. So, yes, [there’s] great opportunity.”
Earlier this month, InsurTechNZ held a physical event that delved into the area of customer experience and how to positively change consumer expectations. Meanwhile, upcoming events will tackle artificial intelligence, start-ups to watch, and hiring or talent development, among other things.
“The content that we’re producing, the events that we’re having, the ideas, the discussions, the networking – it’s all about insurance and how we can make it better,” added the co-chair. “The amount of money going into insurtechs globally just points to the fact that it needs its own airtime.
“I think we’re only really at the start of change, to be honest. I think it’s going to accelerate. Risks are becoming more complex, and it’s typically a harder insurance market. At times like that, innovation is the key, and that’s the place that technology has in the whole ecosystem. So, I think large investments in insurtech, globally and in our region, will continue.”
Like most industries, however, the insurtech space also currently has its share of talent woes.
Smith said: “That is the biggest and hardest thing at the minute. A year ago it would have been access to bigger markets because we were locked up, but now it’s just talent and getting enough people to do the work.
“The opportunity for us, as leaders, is to nurture young talent – so, nurturing talent out of our universities, the young talent that you can bring through and train and help develop. That’s something that both Blair and I and InsurTechNZ are really passionate about: working with the universities, for young people to see insurance as something pretty cool if you get into it.”
As for InsurTechNZ’s priorities, the JAVLN CEO had this to say: “[It’s] growing our membership and adding value and continuing to help insurtechs succeed not only in our market but further afield. The market is enormous. So, all of our insurtechs in NZ should work together and collaborate, because the world is our market.”
