The dilemma—InsureTechs promise, and often deliver innovation, but they often don’t have a customer base or deep subject matter expertise. Brick and Mortar Insurance Companies have deep subject matter expertise and a customer base, but often lack the innovation and pace of an InsureTech. So, in the age of digitization, changing customer expectations, and the flood of capital coming into the InsureTech space, how do you leverage the skillset from both sides of the table?
Like most things, common sense is often the solution, and as the saying goes, “common sense is often not common. For InsurTechs to leverage legacy insurance companies there are some ground rules that will enable success, and from my experience, missing one or more of these will almost ensure failure (in the worst case) or boil the ocean (in the best case).
Business Sponsorship- If you’re going to get involved in leveraging an insurance company to grow your business you need a business sponsor for your project. This is true whether you’re the InsurTech or the Insurance Company…. and, you need to ask yourself some questions about the sponsor. Do they have sway in the organization?
Words on a Power Point don’t nearly match numbers on a spreadsheet. They key is picking the right KPIs and then finding a way to quantify them
Are they really committed to bringing the project to life, or has it been assigned to them? Will they work with you to stay the course and help deliver the benefits which means everybody wins?
Start Small, Build for Big- Most insurance companies, if they get excited about an effort, can bury the InsurTech with work. Remember to prioritize, start with something small, put some wins on the board, and then move into the next thing. Working on a dozen projects, or implementations, within a legacy firm will often mean nothing gets executed. For the InsurTech, avoiding the “siren song” of a dozen project revenue stream is important. If the work doesn’t reflect real benefits, withing the legacy insurer, it is a short-lived victory and relationship.
Get Embedded in the Ecosystem- For both InsurTechs and Insurance Companies, it is important to be embedded in one another’s ecosystem. It’s so often not “what you know” but rather “who you know” that leads to success. Where “suits meet jeans” and “where millennials meet boomers” is a rhythm both sides need to get into. That takes time, the investment of time, an organized plan, and the tenacity to stick to it.
Have the CEO on your side- Have the CEOs of the InsurTech and the Insurance Company met? Do they know what each brings to the table? The Insurance Company Business Sponsor can often facilitate this. It’s sometimes not easy, but knowing the folks at the top, can remove barriers to getting things done, and to increasing pace in a legacy company.
Invest/Get Involved where you can get real world benefits- If you can show revenue growth, expense improvements, better risk selection, and/or better customer experience (with real metrics) you will build fact points that help with the next project and the next company. Words on a Power Point don’t nearly match numbers on a spreadsheet. They key is picking the right KPIs and then finding a way to quantify them. Real world benefits, that show up on the insurance company’s P&L, will win the day.