Editor’s Note: The em­pire strikes back

In­surtechs grabbed head­lines for trans­form­ing the in­dus­try, but car­rier-side in­no­va­tors are on the rise.

Digital Insurance - - CONTENTS - —Nathan Go­lia

In­sur­ance car­ri­ers are as­sert­ing their lead­er­ship po­si­tion in guid­ing the dis­rup­tion of the in­dus­try.

In­surtech's rapid emer­gence and as­cen­dancy, to use a Star Wars anal­ogy, has been seen as “a new hope” for the in­dus­try. But now — to con­tinue the metaphor — the em­pire is strik­ing back. The “em­pire,” in this case, are in­cum­bent in­sur­ers who are tak­ing an ever-more ac­tive role in try­ing to shape the in­surtech sec­tor. About four in five in­surtech fund­ing deals in the fourth quar­ter of 2017 were done by es­tab­lished in­sur­ers, ac­cord­ing to Wil­lis Tow­ers Wat­son's Quar­terly In­surtech Brief­ing. Some in­cum­bents are sim­ply look­ing to fill spe­cific needs with their newly minted tech part­ners. They tend to in­vest in com­pa­nies that in­crease ef­fi­ciency in some com­po­nent of the tra­di­tional in­sur­ance value chain — not in­sur­gents look­ing to dis­rupt. There are, how­ever, still car­rier-side stand­outs look­ing to bring in­sur­ance into a new era us­ing dig­i­tal tech­nol­ogy. For the sec­ond year in a row, we've spot­lighted some of these key in­no­va­tors, and their in­surtech part­ners, for the cover story of this edi­tion. These vi­sion­ar­ies in­clude peo­ple like John Han­cock's Brooks Tingle, whose com­mit­ment as a mar­ket­ing VP to es­tab­lish­ing the wear­able-pow­ered well­ness pro­gram Vi­tal­ity was rec­og­nized and re­warded with a pro­mo­tion to CEO of the en­tire life in­sur­ance busi­ness. A sim­i­lar story comes from All­state's Glenn Shapiro, who em­braced drones and so­cial-me­dia an­a­lyt­ics as chief claims of­fi­cer and is now in charge of all as­pects of per­sonal lines. One can imag­ine sim­i­lar ca­reer tra­jec­to­ries for Trav­el­ers' Beth Maerz, who re-ar­chi­tected renter's in­sur­ance to tar­get the mil­len­nial mar­ket; or Na­tion­wide's Seth Flory, who is bullish on the po­ten­tial for blockchain tech­nol­ogy, as their early projects evolve. Play­ing it safe is tempt­ing, but ul­ti­mately the trend lines in the in­dus­try are clear. Whereas in­sur­ers in the past may have been more se­cre­tive and guarded about their in­no­va­tions, now in­ter­nal star­tups like All­state's Arity and MassMu­tual's LifeS­core Labs are look­ing to es­tab­lish the data-driven scor­ing mod­els they've de­vel­oped as stan­dards for their lines of busi­ness. They aren't wor­ried about gain­ing a small edge, when they could end up lead­ing a much big­ger and more con­se­quen­tial trans­for­ma­tion. “In­cum­bents sent a clear mes­sage to po­ten­tial dis­rup­tive out­siders: by in­vest­ing heav­ily in start-ups and tech­nol­ogy, (re)in­sur­ance com­pa­nies ap­pear to have as­sumed a sem­blance of con­trol over the in­surtech rev­o­lu­tion,” writes Wil­lis Tow­ers Wat­son Se­cu­ri­ties' global CEO, Rafal Walkiewicz. In a way, in­sur­ance is at an ad­van­tage in be­ing some­what “late to the party” for dig­i­tal dis­rup­tion com­pared to in­dus­tries like re­tail and bank­ing. In­sur­ance lead­ers have learned from what's hap­pened out­side the sec­tor and are will­ing par­tic­i­pants in their re­vi­tal­iza­tion.

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