“You get the best innovation when you combine an incumbent working alongside the start-up environment,” said Chief Investment Officer (CIO) of SyndicateRoom, James Sore, at a panel session in London that looked at what re/insurers can do to create the best environment for start-ups to thrive.
“A good few years ago there was a disconnect between the start-ups and the ability to actually make their new companies and ideas relevant. When it really takes off is when the incumbents are brought into that process, so they can actually implement the concept.
“The incumbents, the big existing providers, are still around for a reason – because they manage risk, but you also have the start-up mentality of ‘I can do anything and change the world’. It’s about finding the balance between the two.”
The environment within the insurance and reinsurance industry has shifted from one of scepticism towards implementing new ideas and technology, to being more start-up friendly as firms come under increasing pressure to drive efficiencies with innovation.
Sore said an environment of dynamic change and staying open to constantly evolving the areas designated to be designed and invested in, within both start-ups and incumbents, “works really well.”
He added that regulation should be reassuringly difficult, but navigable; “There should be a clear way to get to these people [regulators] and you should have the information to give yourself the best chance, but it shouldn’t be an easy process.”
Caroline Bradley, Deputy Director of the Insurance Division at the Guernsey Financial Services Commission, said regulators need to be careful “that we don’t become a deterrent to new start-ups. We need to recognise that these new technologies can enhance the customer experience, but be aware of the risks as well as the opportunities.
“It may be a great journey to buy the product, but how do we then look after the customer afterwards and deal with complaints? We don’t want to stifle innovation but at the same time, we’ve got to think about the risk to consumers and the financial world generally.”
