Insurtech Connect 2019 - Review
Insurtech Connect was held in Las Vegas on 23 to 25 September 2019
Insurtech Connect, or ITC, was big. Really big. Below is a summary of my key take-outs and an industry perspective from a first-timer's experience of ITC. I was invited through Insurtech Australia to be part of the Australian delegation, supported by Munich Re and Austrade to experience, learn and network via ITC. It was a great experience and revealed a great opportunity for our business within this ecosystem. Quick Summary of Insurtech Connect (ITC)
- Insurtech is a nascent industry and growing quickly. In 4 years, the ITC event has gone from a few hundred participants to over 7000 people, hundreds of exhibitions and marketplace participants
- AI and technology to improve business processing capabilities is everywhere. This could be seen in Machine Learning applied to claims to identify possible fraud or drones with inbuilt AI to view, assesses and report on damaged property, for example
- Product development tools, for rapid development and deployment of insurance products, are coming online reducing carriers' development cost and increasing their speed to market and capabilities
- Insurtech presents a significant opportunity as digital adoption, internally and with end customers is still low - the market is there, looking and wanting to evolve and improve.
ITC is a great conference. The Insurtech Industry is just getting started. The ways of innovation are coming, the evolution of business models is occurring at a rapid pace. In short, the market is well-placed to both adapt new innovations and capitalise on them. In addition, startups that are focusing on the insurtech industry should be encouraged to keep going and keep pushing forward. The market and opportunities that exist are sizeable. Below are reflections on a few key sessions that I attended.
What business are we really in?
Chris Colborn, Chief Experience Officer, Lippincott Chris posed the question of what business are we (insurance) really in? It is a good question to ponder and Chris drew upon other industries and the evolutions that have occurred within them. For example, with new iPhones, whilst their price, value and replacement costs have increased, there is actually a reduced need for insurance due to less reliance on the physical product and rather a deeper connection with the data contained within the ecosystem. The hardware can be found easily - find my iPhone, the data stored remotely through iCloud or other data services. Chris challenged us to think whether "what the product does is valuable for the customer."
The Insurance Industry Needs Disruption. Let's Do It Ourselves.
Soaring Valuations & the Possible Insurtech Hangover
Jay Gelb, Managing Director, Barclays Vincenzo La Ruffa, Partner, Aquiline Capital Partners Andy Lerner, Managing Partner, IA Capital Group Carsten Maschmeyer, Founding Partner, Maschmeyer Group Ventures George Schwegler, CEO, Transamerica Ventures Moderated by: Mee-Jung Jang, Managing Director, Techstars A great session looking at the valuations and investments made into insurtech. Over the past few years, close to $15bn has been invested in insurtech businesses. These businesses range from new carriers such as Lemonade to periodic offerings such as Trov, through to AI and Machine Learning tools aimed at improving processing capabilities and efficiencies. The investments to date have been big, and have grown significantly each year. It was interesting to hear that the panel agreed that there hadn't been $15bn in value created by these businesses just yet. They contrasted that level with Stripe's recent capital raise that valued it at over $30Bn. So that means the investors and investments are still waiting to see the returns materialise. Insurtech as a whole is still an early and developing investment class. Three key areas of opportunities for Insurtechs were:
- Insurers no longer have all the customer data, insurtechs can quickly locate, generate and build vast sources of valuable customer data. It has never been easier to digitise customer data.
- Insurtechs are broadening what they do to become MGAs and get authorised licenses to expand their offering.
- Major direct insurers spend over $1bn annually on advertising - that is a big number spent reaching and acquiring customers.