Women in startups
Women-founded insurance startups are rare, but the ones that do exist are demonstrating the value of their originators' unique experiences.
The gender gap in insurtech is wide, but women leaders are closing with innovation
The insurance industry, known more for its risk-averse profile than its appetite for disruption, has begun to fundamentally shape-shift over the past decade. A great deal of that change has come thanks to insurtech startups that are changing the game by bringing new technologies to the industry. However, as in other technology sectors, as well as the insurance industry itself, the statistics around women leaders in the insurtech space are underwhelming. A recent study of 535 insurtech companies worldwide by Eva Genzmer of the German insurtech Friendsurance found that just 4% — 20 in total — were founded by women. “Insurance isn't different than any heavily male-dominated industry,” says Snejina Zacharia, founder of the AI-based distribution insurtech Insurify. “What's key is that successful young women who have raised money have to be true to themselves. They can be more successful because of their ability to be more intuitive with the way they run their business, build products and improve the customer experience.” Zacharia became interested in the insurance industry while trying to manage a claim for a minor auto accident in her last year at MIT. “I was shocked how fragmented and disjointed the car insurance customer experience is,” she explains. “I spent hours talking to different agents, filling out online forms, and answering the same questions over and over. I felt the user should be able to make decisions on their own based on data they provide.” Many insurtechs are, like Insurify, focused on the customer experience, says Karlyn Carnahan, who leads the P&C insurance practice for Celent. “There are startups focusing on distribution, analytics or operational
services; the insurers who are increasingly partnering with the startups; and the investors, including insurers, who see the potential to make a lot of money in this space,” she says.
The reason insurtech has moved front and center is because as a vertical, the industry is ripe for change, adds Donna Peeples, a Digital Insurance Women in Insurance Leadership honoree in 2014, when she was chief customer officer for AIG. She agrees that insurtech is pushing the industry's customer interaction forward.
Now, she is chief customer officer at Pypestream, a customer messaging startup that counts insurance as one of its major industries, putting her on the ground for the insurtech revolution. Peeples often represents Pypestream at major insurtech events, with her industry experience adding credibility to the company's message.
“End users are demanding better service, more consistency and increased transparency in companies they do business with,” she says. “In their minds, Amazon makes it easy, why shouldn't my insurance company?”
Though Peeples agrees the numbers for women in insurtech are “dismal,” she believes that doesn't mean that women should be afraid to throw their hats in the ring. Insurtech is driving industry changes that represent significant opportunities for all entrepreneurs, she says.
“I think about my two daughters and how I want them to grow up to be fearless and not be afraid to expand their platform, take on more responsibility and deliver results,” she says. “It's exciting and an honor to be a part of what is happening, with the possibilities to make people's lives better.”
Carnahan agrees. For innovators in the insurtech space, insurance has a great deal of market potential if the current model can be disrupted, and those who provide services for insurers have the ability to impact a large market, she explains. In addition, insurance lends itself to creative uses of technology as the product is generally data-based and services can often be distributed through technology. “We don't have parts that need to ship,” she says.
Like any startup, however, the biggest challenge is speed to market — getting revenue before running out of runway. Insurance carriers traditionally have a very slow sales cycle and don't usually make fast decisions, while there are often issues getting new technologies integrated with existing application architecture.
The other challenge is the culture of many insurance companies, in which carriers are more comfortable with traditional processes and are more likely to use new technologies after they've been proven.
“Insurtechs that are most likely to be successful are those that understand insurance and are able to articulate a message about the true benefits that will accrue to a carrier; those that have a process that allows a carrier to quickly test with little investment; and those that have clear proof points about the benefits,” Carnahan says.
So while women — and men, for that matter — who tackle the insurtech sector must have a great idea, there's also a human side to the story. Patience and empathy are key to building successful businesses.
“A lot of people might read about overnight success stories in TechCrunch, but a lot of companies don't make it, or it takes 15 years before it's a profitable business,” says Jennifer Fitzgerald, co-founder of the online life insurance broker PolicyGenius. “You have to make sure you have a good support network.”