Insurance Innovation Reporter: Making the Insurer-InsurTech Partnership Work

Artificial Intelligence - July 31 2019

The Insurance Innovation Reporter (IIR) recently featured an article by Chisel AI’s CEO and founder Ron Glozman titled Opposites Attract: Making the Insurer-Insurtech Partnership Work. In his commentary, Ron offers practical advice for large insurers on how to establish productive working relationships with early-stage InsurTechs. His insights are based on Chisel AI’s experiences working with some of the world’s largest commercial insurance carriers and brokers.

While large insurance companies and small insurtech startups are strange bedfellows, the fact is that they need each other to drive innovation and digital transformation at the pace that the market and insurance customers demand.

Ron stresses that, in order to get the most out of InsurTech partnerships, insurers must “value and nurture what’s different about startups,” namely their innate agility, willingness to embrace failure, and quickly iterate to succeed. 

The Elephant in the Room

The sheer size of many established insurance companies inadvertently creates challenges and dangers for startups who want to work with them. It’s like a mouse dancing with an elephant. In the IIR article, Ron makes a strong argument for why large insurers need to streamline procurement for startups and reduce the contractual and compliance burdens associated with getting an initial pilot off the ground: 

Startups typically fundraise enough financial backing for the first 18 months of operations. If the procurement process takes longer than 18 months, the startup will run out of money and be dead in the water before they can negotiate a contract and begin to prove their worth.

Lengthy procurement cycles and exhaustive paperwork can stifle insurance innovation before it gets off the ground. When an elephant shuffles its feet, it’s easy for even the nimblest mouse to get crushed underneath.   

Ron also shares his thoughts on innovation labs and why large carriers and brokers shouldn’t silo innovation or data when working on projects with InsurTechs. Ultimately, insurers and InsurTechs will need to establish deeper relationships to make digital transformation a reality. While Ron’s focus is on commercial insurance, his insights apply equally well to personal lines.

You can read the full article on the IIR website here.

 

 

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