More than 1,500 insurance industry professionals gathered in Las Vegas to support industry innovation last week. The InsureTech Connect conference offered incumbents, venture capitalists and start-ups from around the world a chance to learn from each other on topics like rebuilding the legacy stack, machine learning and artificial intelligence, the peer-to-peer models and developing and selling a culture of innovation.
I state that support for innovation was unexpected because, having attended more of these meetings than I care to count over the course of my career, this one was refreshingly different and, dare I say, exciting.
First, the bulk of the attendee demographic was different: much younger participants, mostly from start-up ventures, aggressively networked with founders, co-founders and CEOs of some of the largest technology companies in the space. The difference also was reflected in the efforts incumbent insurers are putting into collaboration with the next generation of insurance innovators via efforts such as the Global Insurance Accelerator (GIA). And the amount of financial support these start-ups are receiving is impressive—the last available figures show that in 2015, funding to insurance tech companies rose by a factor of 3.5 year-over-year to hit $2.65 billion, according to CB Insights. In property and casualty lines alone, insurance tech has seen 50% more deal activity in 2016 YTD than in all of 2015.
Second, substantive ideas didn’t just originate from the 175 innovators that presented in 30-minute sessions described by some as “breakout speed dating.” Big ideas flowed outward from those sessions during networking breaks, lunch, and receptions. Among the higher-level topics: the role of the disrupter, shifts in human capital, intermediaries’ role in the distribution chain, and the ebb and flow of the competitive landscape.
Long considered the elephant in the room, the insurance industry’s reputation as a risk-adverse sloth when it comes to the pace of change was also acknowledged. As one presenter put it, “You have to understand you are trying to serve an industry that predates some religions.” Age aside, the acknowledgement by Hamilton Re CEO Brian Duperreault that the insurance process is still “grossly over-expensed” spoke volumes to the inefficiencies still plaguing insurers.
This acknowledgement alone was framed as not a challenge, but an opportunity. And it made the realization of just how far and how fast the industry is moving down the innovation corridor extremely relevant. Many of the largest insurers disclosed developing their own accelerator programs or are working with GIA, or other organizations such as Startupbootcamp, gener8tor, or Plug and Play Tech Center to launch new products and services. Still others have established their own R&D labs and technology venture buys in the works.
For the first time, we have tangible evidence that insurers and their business partners are willing to do more than “talk the talk” regarding their ability to become a true, innovation-driven industry. This is a challenging and exciting time for incumbents and industry neophytes alike.
