Product Family


Principal at XL Innovate

Insurtech enthusiasts,

Last week I attended Insurtech Connect Conference in Las Vegas. The conference kicked off less than twenty-four hours after last Sunday evening’s tragic events. The city – from the #VegasStrong signs to the heightened level of security to the locals resuming their daily routines – demonstrated remarkable resilience and resolve as they began their community’s recovery. 

To the city of Las Vegas, thank you for opening yourself up in your time of grieving. My thoughts and prayers go out to the victims, their families and friends.

In times such as this, it is difficult to  put on a brave face and focus on Insurtech. But as the people of Las Vegas embodied, the show must go on. 

Viva Las Vegas. 

So beyond being extraordinarily struck by the indomitable spirit of the Las Vegas community, what did I learn? The answer, once again, is a lot. 

Thank you, Captain Obvious.  Now is an exciting time to be in insurance. For proof, one had to look no further than the 3,800 attendees buzzing around the Caesar’s Palace conference center. Given the immense energy and excitement, one can be forgiven for thinking these attendees were all getting ready to attend Celine Dion’s performance down the hall instead of gearing up for an Insurtech conference.  Near, far, wherever you are, whether it’s appetite for innovation, the desire to be more competitive in the market or simply FOMO, industry participants firmly believe there are large and interesting problems to be solved, and are moving from talking to  building and doing.

Why can’t we be friends? The ability for Insurtech startups to partner with carriers (and carriers’ openness to work with startups) is much different today than it was a year ago. Relationships have matured and frenemies have turned into friends. Today, startups are no longer disrupters; disrupters act alone. Startups now recognize the need to have partnerships with incumbents to help them grow and make an impact. As a result, they are backing away from adversarial rhetoric. Instead, the Insurtech movement is  coalescing and beginning to march in lockstep.

Warning: All you can eat data can lead to data indigestion.  The data arms race has come to insurance. Insurtechs and insurers are able to collect massive amounts of data and build a treasure trove large enough for Scrooge McDuck to swim in for days on end. That said, there’s data – and then there’s data that’s actually useful. Insurers are often collecting data and analytics but don’t know what to do with it. Insurtechs can add value by conducting the necessary  pre-processing of data, so insurance companies can work with actionable insights, rather than spending their time wading through data. In order to do this, an Insurtech must understand the process and operational landscape and provide  solutions  rather than merely data. 


...building dynamic products is critical and dynamic pricing will undoubtedly become more prevalent.

The more I know, the less I understand.  Many  Insurtechs have learned domain expertise, but haven’t lived within insurance for any meaningful period of time. Insurtechs need to understand the complex matrix that is an insurance company. Many insurers have siloed working groups. Are Insurtechs coming into the company at the right entry point? Be clear on your own value proposition when pitching to them because, in the end,  solutions must live within a larger ecosystem of the carrier.

Ch-ch-ch-changes.  A common theme over the two and a half days was navigating the change in the risk landscape.  Risk pools are going to become more precise in the risks they insure.  New risk categories are also emerging. Technology is not only changing the way we can assess and understand risk, but it is also fundamentally changing the nature of risk as well. Risks emerging from human error are going away, while risks from machines are rising. The notion of what we are insuring is changing – take auto as an example.  Are you insuring the driver or the software?  As the risk profile alters, we need to know who is in control of the risk.  The entire liability framework of insurance is changing with technological progress.  

The more we continue to look backwards, the farther we’ll fall behind.  Products will look fundamentally different in the future. We are moving from passive risk transfer based on historical analysis to real-time, active policies. Therefore,  building dynamic products is critical  and dynamic pricing will undoubtedly become more prevalent. 

Lipstick in moderation, good. Pigs, good. Lipstick on a pig, not so good.  Historically “Insurance technology” has meant no tech or low tech at best. Let’s face it, the industry is very far from straight through automated processing. Today’s systems are very old and aren’t ready for what consumers need today. Incumbents need to really embrace modern technology and find ways to become real users of this technology. Incremental improvements simply are not enough. Insurers have to challenge themselves to take big risks. Insurers aren’t set up to take big risks and aren’t willing to fail. Don’t fail fast, win fast. Insurers are in a unique position to flex their muscles and establish themselves as enablers of this new technology movement.

I tripped and fell into a rhythm with you.  Insurers have historically organized themselves by product segment. Did that make sense for several decades? Sure. Does it make sense now? No. The shine is clearly wearing off. Insurers need to pull themselves out of this rhythm and move away from the siloed product driven construct and build an organization that is customer driven. Naveen Agarwal (Chief Customer Officer of Prudential) put it bluntly stating, “If your website is showing your org chart, you’re in trouble.” Ultimately, the way insurers do business will be  more focused on solving customer problems over selling products

Man versus machine versus man’s best friend?  Human capital in the insurance industry remains critical despite advances in technology. Not all UI is created equal. The consumer market is very different from the commercial market. If a customer is looking to insure their favorite Dalmatian, Teddy, a website or an app is more than sufficient - sorry Teddy. But, if a customer is looking to insure the Panama Canal, an app will never be enough. In that scenario, people and conversations are still paramount. There’s no doubt that new, focused tech is important, but  sometimes human domain expertise trumps what a machine can provide

And now, some facts from the conference that may only interest me...

  • GE estimates there will be 20bn sensors in five years
  • Over the next couple of decades, auto premiums will decline by 40-60%
  • Bermuda will write $160bn in annual premiums
  • You cannot snore and dream at the same time
  • $100bn from Harvey, Irma, Maria will flow from the insurance industry into those affected
  • After an earthquake in China, only 1 percent of the economic loss will be insured
  • Sandy hit the most insured square mile on the planet but only half of economic loss was insured

That’s all for now.  RIP Tom Petty.

Yours in Insurtech,


P.S. As an Insurtech fan, it was very exciting to come home from the conference and see the Guidewire acquisition of Cyence. This is yet another strong data point that shows that M&A activity is alive and well within the space and will continue to stimulate investments and partnerships going forward.

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