In a virtually held 2020 ILS Bermuda Convergence event, Insurtech became the main focus on a panel featuring Lyndsey Toeppen, Former Vice-President, Sandbox Insurtech Ventures and Adrian Jones, Deputy CEO, P&C Partners, Ventures & Strategic Partnerships, SCOR.
The question of what it takes for an InsurTech to be successful will be in the long-term surfaced, with Toeppen suggesting that those who remove the attitude of becoming the first to create a solution are more likely to succeed.
She explained: “I think the short term winners are the ones that can get out of that attitude that they have to come up with all the solutions themselves, and can look to the rest of the market, technology providers to MGAs, to new capacity partnerships and syndication for how they grow and evolve.
“There’s kind of this looming fear for a lot of people about some of the big tech companies and big tech players, and whether they’re going to increasingly enter insurance. And I think one argument that one can make is that right now, a lot of the Googles and Amazons and Facebook’s of the world are dealing with plenty of technology regulation and legislation. And, I don’t know how eager they will be to become regulated insurance industries and later on additional regulation.
“But, I think one of the reasons that this is such a recurring, sort of almost fear and I think it can be really a spur to action, is that those companies are well known to be ones that are willing to experiment and iterate quickly. They’re not afraid to try something that is outside their core competency to see if it works.
“And I think there’s something to be learned. I think some insurance and reinsurers have taken those lessons and are trying to put together little in-house experiments. The market will move in many different directions. But if you start laying the groundwork for that experiment first, and intrinsic sense of innovation, I think those are the players that are well positioned for the long term.”
Jones also agreed that InsurTech startups will have more chance of surviving if they learn from previous mistakes made by other companies. He further noted that underpricing may not necessarily do damage as it accumulates more traction.
He added: “I think in some cases our industry has over learned the lessons of the past. On the other hand, we see a lot of startups who have not learned the lessons of the past at all.
“And, so, they believe for instance you can under-price your product, essentially forever and show that you’ve got great traction and grow to be a really big company. And, actually, all that you’ve done is accumulated a bunch of underpriced policies.”