Here’s a riddle for the insurtech era: How can one have insurance startup experience that comes from before the current wave of sleek, digitally focused companies? It’s true that the concept of the “insurance startup” predates the current wave of new entrants -- but for a time, the motivations and companies were less glamorous.
Today, Nicole Perrault is chief risk officer for Hippo -- the home insurance insurtech that is one of only a few billion-dollar “unicorns” in the sector, especially on the P&C side. But her ability to stand up new concepts to meet coverage needs was honed a decade ago, at the then-recently launched Narragansett Bay Insurance Company, which entered an underserved market to deliver coverage capacity that hadn’t been available before -- coastal homeowners.
The major difference between that class of startup and Hippo, Perrault says, comes from the customer-expectation side of the equation. NBIC customers were attracted to the products because they were unique. Hippo’s homeowner’s coverage has a lot more competition, and so today’s insurtechs differentiate based on customer experience.
“[NBIC] provided increased capacity for our consumers, and while we were successful with that goal, which was one of the problems that this is solved, we didn't have to be as successful at other areas because we were serving an underserved market,” she says. “I knew, though, that eventually you need to succeed at technology, customer experience and marketing. That’s where insurtech has been making significant gains.”
Valley style
Despite the surface-level differences -- which do matter, Perrault says -- insurance startups new and old share deeper DNA.
“I thought I was at an insurance startup until I came to Silicon Valley and was shown what a startup was really like -- it’s on steroids here,” she says. “But it’s not that fundamentally different, which is there's a problem that needs a solution. How we're going about and achieving it is probably where the differentiation lies.”
Hippo’s aggressive choices to focus on all its customers more often, leveraging digital technology for more touchpoint opportunities, represented a fundamental change in how the risk function works, she explains: “If you think about it, 5% of homeowners will have a claim, and insurance has been there for them. And at Hippo, we make sure the 95% of our other customers don't get ignored. We help our customers identify and resolve issues in their homes before they become major problems. As a risk manager, it actually provides a lot of opportunity for me because not only are we solving our customer's problems, we're also making for a better risk profile.”
And because of the small team size at Hippo’s outset, Perrault was involved in the construction of the base platform that powers all those things, including components for pricing, portfolio management, and insurance product design.
“I sort of, you know, yelled out across the room, almost literally,” she laughs. “And it was built in the matter of four hours. In my career that would have been something that would have taken three months to scope out and six months to build.” While growth at the company means things take a little longer now, “It still is a very interactive and agile environment where I get to work directly and closely with the technology and product teams to build the tools for growth both on the underwriting side and for the consumer side,” she adds.
An added bonus to this work is that Perrault is confident that the high-touch infrastructure Hippo has built can adapt in a positive manner to the post-coronavirus era. Hippo has invested in virtual inspections that link up to vetted professionals for any needed repairs.
New pathways
It’s likely to take quite a while for the center of gravity in the industry to shift from the traditional insurers to the insurtechs, but that doesn’t mean professional advancement for women should take a back seat. It’s just likely to look different than what the sector is used to, Perrault says.
“Traditional insurance companies, especially large insurance companies and large companies in general, have these prescribed paths: They have these leadership programs and they have these prescribed things that you can get into that somebody early on can say, that's the 50 steps I'm going to take, and that's my support network for getting there.
“I actually think the ability to mentor and have an impact on a person is much larger in this kind of organization,” she explains. “And I can speak from experience because i’ve been at different startups, regardless of the definition, but that gave me an opportunity to have executive level mentorship relatively early on in my career.”
Confidence is the trait that Perrault most tries to instill in people she mentors. “You cannot get comfortable in decision-making or evaluating risks until you actually are required to do it,” she explains. “I've had many up and coming employees ask me, ‘how do you make these decisions? How do you evaluate this risk?’ And I said, well, you only get comfortable doing it by doing sort of build that confidence.”
Hippo and other insurtechs, she concludes, provide more opportunities to learn by doing that leads to a more empowered, confident and diverse workforce. “You have to be in an environment that allows you to make those judgments, but says it's okay to make mistakes and still support it,” she says. “In big organizations, you're not often allowed that opportunity, but at Hippo, because we are so lean, more employees are empowered to make those judgment calls.”
