Insurtech Movers and Shakers — Through Benjamin Franklin’s Eyes
July 17, 2018 | Justin Davies
Benjamin Franklin once said, “All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.”
To be sure, he was not thinking about today’s re/insurance world. However, the wise quote is apt for what we now call insurtech.
We all know of “immovable” people and organisations. They comprise those who think insurance has been around since the 1600s, their businesses are doing pretty well, and thus only require some tweaking around the edges. Then, there are those for whom technology is somewhat of a necessary evil and change is a bit of a dirty (or scary) word. For them, Franklin had some wise words. “When you’re finished changing, you’re finished.”
I’m certain we all know the “moveable” types as well. They realise there’s something brewing and can sense a broader shift in the industry. They might reference the Fourth Industrial Revolution or Industry 4.0 as an overarching influence, or just acknowledge that digital-first companies such as Apple, Amazon, and Google are changing the way people live, work, and communicate — significantly impacting the way business will be conducted in the near future.
However, Franklin’s “movers” in the insurance space are still relatively scarce. This group makes things happen, understands the fast-evolving intersection of insurance and technology (preferably in that order), leverages domain expertise to come up with new and innovative ways to improve the insurance lifecycle, and proactively experiments and builds differentiating offerings. While I am not as immersed in insurtech as some, I do have the privilege of knowing and working with a few pioneering experts. One of those happens to be ChainThat, an insurance specialist blockchain organisation in which Xceedance invested. ChainThat continues to be at the forefront of insurance blockchain innovation, moving the insurtech needle to speed-up adoption of distributed ledger technology.
At Xceedance, our team is working with a start-up MGA looking to transform the way policies for high net-worth individuals are underwritten. The MGA aims to breathe new life into a conservative London market by simplifying and reducing the cost of insurance while improving the customer experience and their understanding of risk. It partnered with us to develop a bespoke, integrated policy administration system and rating/pricing engine for multiple lines of business. The platform engineered by Xceedance utilises data feeds to considerably reduce the number of required risk evaluation questions a prospective client must answer. For example, just using an address, the system populates details such as house construction, roof type, and rebuild cost (this, especially, is a question for which few people would know the answer). Moreover, the system gives a risk profile for various factors based on the locale; and, using machine learning, it intelligently handles underwriter referrals. Drawing on the underwriter’s decisions, the system learns and applies the same logic to similar cases in the future, reducing referrals and increasing instances of straight-through processing.
Leveraging such a reductionist approach in processes and workflows, the MGA will potentially underwrite several hundred policies every week with just two or three underwriters. Compare that to an established London organisation, where (I have been told) an underwriter may evaluate and clear up to three polices every two days for the same type of high net-worth clients.
Future-ready enterprises anticipate change better and work towards achieving a sustainable competitive advantage. Call them what you will — disruptors, innovators, business-savvy technologists — but above all, they’re movers, and thus, insurtech shakers too.
Not all will be successful. But as Franklin proclaimed, “Do not fear mistakes. You will know failure. Continue to reach out.”
Justin Davies is a vice president and EMEA region head at Xceedance.