Forward-thinking executives who are leading the insurance industry’s digital transformation
It’s an exciting time for insurance. Startup activity and investment — $1.7 billion in 2016, according to CB Insights — are at an all-time high as the growing cohort of “insurtechs” targets legacy processes for digital reinvention. On the carrier side, visionary executives are spearheading internal efforts to emulate those companies’ abilities to ideate, iterate and execute on a 21st-century timeline.
Over the past several months, Digital Insurance consulted with experts across the industry to assemble this list of 20 innovators who are truly leading insurance into a new era defined by digital efficiencies and effectiveness. These leaders are transforming an industry known for paper forms and overnight batch processing into a fully digital experience from quote to claim, leveraging real-time data from connected devices and advanced analytics to create new insurance products that meet modern needs.
Alex Timm FOUNDER, ROOT INSURANCE
Insurance is often a family business, and it was for Alex Timm, the founder of Root Insurance, a usage-based insurance company that handles everything from data collection to quoting to policy servicing through its smartphone app.
Timm’s first job — at age 14 — was in insurance, making phone calls on behalf of his father’s agency to help customers manage policies. But despite that baptism by fire, he fell in love with the industry.
“When your neighbor’s house burned down, insurance was right there to help them pick up,” Timm says. “It’s a very complicated, mathematically driven industry, but I’ve always loved that there’s this ‘noble cause’ at the same time.”
Eventually, Timm he got into the actuarial side of the industry and worked at State Auto and Nationwide, the big insurance companies located in his hometown of Columbus, Ohio. That’s where he first began to notice that the insurance industry needed to make some changes. While he was working as a consultant for Nationwide, “[the insurance industry’s] digital satisfaction ratings were worse than government services,” he says. He saw an opening to create a new kind of insurance company that was more customer-friendly.
“There was very little innovation in the space, and it was frustrating,” he says. “There were some really obvious things that were going on like big data — it was fairly obvious that it could tell us a lot about risk profiles. But we didn’t know how to get it or make sense of it. That’s an inordinate amount of inefficiency that consumers are paying for.”
Timm set out to build a data-driven insurance company from the ground up that could incorporate the full potential of advances in analytics, digital channels, and self-service with the singular goal of making insurance a better product for policyholders. So in March 2015, he began working on Root.
Root’s goal is to lure good drivers with the promise of lower rates. Once someone downloads the app, it collects data about that driver’s habits over a period of about three weeks. After that time, a quote is generated.
“We pull the data that we collect from the car, pass it to the data science team and run predictive analytics on it” to get a handle on how a driver operates, he explains. “The smartphone data is unbelievably granular — an accelerometer can pick up very minute details.”
Root’s early days were “much like starting a technology company” Timm relates. That’s because his goal from the start was a fully integrated app experience.
“We were focusing on the app, because the first big piece was the technology. Consumers want to do business on a smartphone, there shouldn’t be 100 different fields to fill out with two thumbs. It should be easy, not confusing.”
Twelve of the company’s 20 employees are in the technology department, a 60% ratio that Timm expects to keep up even as it expands into new markets.
The fact that Root doesn’t rely on legacy systems and is building everything from scratch is to its advantage, he says.
“Technology changes so quickly and so fast, that if you’re not consistently reinventing your entire code base you’re going to be left out,” he says. “We have that agile mindset that will enable us to innovate as we scale and allow us to avoid a lot of bureaucracy.”
Actually taking on risk and selling coverage was a crucial component to his plan, he asserts: The idea of simply developing technology to sell to insurance companies never crossed his mind.
“You can’t reinvent the industry by sitting next to it,” Timm says. “Many of our startup competitors are making mobile apps and trying to sell to or partner with an insurance company. But then you have to succumb to [that company’s] business model.”
When discussing how his company is different, Timm is fairly critical of established insurance practices. For example, he says that the current system of pricing is “extremely broken” and not “based on the right data.” But that’s to be expected because of his passion for serving the insurance customer. Timm truly believes in the transformative power of digital.
“The way you do it better than everyone else is data science,” he says, explaining that technology takes some of the pressure off of consumers at application time and reduces the need for esoteric links like credit scoring to refine pricing.
“What it will do is it will begin to make insurance a lot more consumer-friendly,” he says. “We can cut out a lot of those naive assumptions about these old underlying variables. When we begin to measure these things better, we can make the world fairer.”
At the same time, Timm and by extension Root are acutely aware of the further disruptions coming to the insurance industry. The company recently announced a program for Tesla owners who use the automaker’s Autosteer driver-assistance technology. Through an integration with Tesla’s onboard computer, Root can identify when drivers switch to Autosteer and provide a discount when it is on. The program is bold, but it’s the data-driven approach that led Root to embrace autonomy
“We pull the data that we collect from the car, pass it to the data science team and run predictive analytics on it.”
at a time when many insurers are not sure how to respond. That comes from Root’s belief that it’s how you drive that matters.
“We believe that these self-driving cars are performing better. It’s been proved very strongly in the data,” he says. “Insurance is going to have to evolve, because [autonomous vehicles] will make insurance far cheaper over time.”
Daniel Schreiber CEO & CO-FOUNDER, LEMONADE
Lemonade CEO and co-founder Daniel Schreiber laments the distrust consumers have for insurers. A major goal of his company, a renters insurance carrier, is to turn that on its head.
In announcing Lemonade last fall, and in interviews and public appearances since, Schreiber explains that because customers don’t trust insurers, its easy for them to rationalize misleading carriers. He believes that consumers need a bigger stake in the insurance product in order to disincentivize that behavior.
In many ways, Lemonade is like many insurtechs: It leverages smartphones heavily, as the main customer-acquisition channel and claims-reporting tool. That meets customers’ demands for a modern insurance experience, Schreiber says.
However, going beyond that is the company’s financial model. At the time they sign up, customers select a charity to which Lemonade will donate unused claims reserves at the end of each year. This means that customers know that they will only be hurting their cause of choice by exaggerating losses.
“We create a group, in a sense, of peers who are defined by their common cause,” he explains.
Early on, Lemonade attempted to term this “peer-to-peer” insurance, but the company abandoned that term due to imprecision. “We had expected it to be something that would help people understand the model, but it generated more questions than answers,” Schreiber explains.
Now, technology is more of a selling point and differentiator for Lemonade. Schreiber points to its artificial intelligence and behavioral science aspects as ways that it stands out from the crowd of renters insurance. That doesn’t mean the behavioral side is ignored. Lemonade employs a behavioral economist— former Duke professor Dan Ariely — to help refine its messaging as it gets more data on its customers. But Schreiber also is working to hire additional talent and build out Lemonade’s tech infrastructure.
The company operates a combination of server-side technologies — rating engines and back office tools — and front-end tech that enhance the customer experience. These include AI chatbots named after real-life employees to control claims, enrollment and customer service via its mobile app.
“The idea that you can file a claim without filing a piece a paper, without speaking to a human being, by a few taps on a phone and recording a short video of yourself so that it is all over in three or four minutes, is a pretty radical departure from the incumbent experience,” he says.
Funding comes from investors including XL Innovate, Sequoia Capital, and Tusk Ventures. Lemonade is based in New York, but does some back-end work in Tel Aviv, Israel. It is licensed to sell insurance in New York and Illinois, and is hoping to be in 47 other states by the end of this year. In its first quarter of operation in New York, the company sold 410 policies, it says.
Dan Preston CEO, METROMILE
Metromile is a trailblazer among insurtech companies. It is one of the first U.S. carriers to focus only on usage-based insurance. And CEO Dan Preston has presided over major advancements at the company since his appointment in 2014.
Preston started out at Metromile as its CTO under co-founders Steve Pretre and David Freidberg. His intimate familiarity with the company’s core data model and technology platform served well as he took over the CEO role. Under Preston’s watch, Metromile has become a full-stack insurer (it was a managing general agent when he took over), moved into bigger offices in San Francisco and begun an aggressive campaign of value-added services, claims innovation and expansion.
Metromile works by using on-board telematics devices to track how many miles customers drive each month, then charges them based on that. It’s not as interested in how people drive, but rather how much. That’s because, Preston says, driving less is a bigger predictor of loss than almost anything else. So the company uses traditional underwriting methods to set a price — but it’s per-mile, rather than per-annum.
Of course, that means the company’s model of metered insurance isn’t for the general auto insurance market. Metromile targets urban drivers who don’t take to the road as much. That’s driven some of the innovations Preston led over the past few years. Metromile’s location-aware technology is able to notify customers if they need maintenance or if they are in danger of receiving a parking ticket, for example.
“What’s cool about that from a customer perspective is not only are you saving money with us but you’re also getting more value,” Preston explains. “You may be saving $500 a year with our insurance products, but you’re also probably saving like another $300 or $400 on parking tickets and maybe a few hundred dollars on getting your car repaired correctly.”
In late 2016, Metromile crossed an important boundary: With the acquisition of Mosaic Insurance, it became a full-fledged insurance carrier, licensed in all 50 states. Preston says that was a goal from the early days of the company: It never wanted to be a vendor to the insurance industry or just an MGA — though those were important steps.
“One of the challenges was that an incumbent trying to take this product to market would cannibalize their own business in such a way that it would be exceptionally disruptive,” Preston says. “The only way to get this product off the ground, we felt, was to start from scratch and actually build up [to an] insurance company.”
Now that it’s open for business in all states, Preston says that he’s excited to enter into states like New York, Florida and Texas, where the opportunities are greater for Metromile’s unique model.
“I think the overall trend is toward driving less, especially in cities,” he says. “The active use of Uber and other ride-sharing services, like car-sharing, better public transit, more bike lanes, means the car is being used less for commuting.
Rooney Gleason PRESIDENT, U.S. RETAIL, ARGO GROUP US
As a broker for Argo Group, working with grocery and retail clients for the commercial carrier, Rooney Gleason identified an opportunity to digitalize store inspections, with an eye toward reducing slip-and-fall accidents. The logic was that if stores had a more regulated process for inspections, trouble spots would be caught earlier. So he started a tech company, Gleason Technology, to develop it.
Eventually, Gleason returned to Argo and brought his technology, now called Argo Risk Tech. The platform leverages mobile devices that pair, using near-field communication or Bluetooth technology, with a series of sensors, beacons or QR codes placed around a business. This allows a supervisor to track an employee’s path during a safety check. Any records required during the safety checks are logged electronically and are stored in the cloud, for easy access and searchability. An array of Internet of Things devices are worked into the process — for example, for perishable item checks, Argo’s platform supports Bluetooth thermometers that can send the temperature reading directly to the log without requiring any input.
When there’s an incident, the employee only needs to bring their mobile device, which will walk through the process of taking pictures and recording important information. That creates a first notice of loss that is immediately sent to Argo. It can then be cross-referenced with the inspection information to help adjudicate the claim.
Now, as part of its insurance product for the grocery industry, Argo will set up Risk Tech for new clients, positioning itself as a full partner in risk management. “There hasn’t been much new offered in what is a mature industry,” Gleason says. “This really differentiates us because what we’re leading with is tech and not insurance.”
Shobana Sankaran GM OF INSURANCE, NAUTO
For startups targeting the insurance industry, coming up with an idea that may impact the sector is one part of an equation. But marrying an idea to the actual pain points of insurance is a separate task entirely. At Nauto, a telematics startup based in Palo Alto, Calif., that’s where Shobana Sankaran comes in. She is GM of insurance for the company and a more than 15 year veteran of the industry, including stints at Progressive, Esurance and Metromile. Nauto offers a platform to help measure driver skill. The technology includes inward and outward-facing cameras, as well as sensors, to detect road conditions and monitor how well a driver reacts to them. Sankaran’s experience helped her communicate the company’s value proposition effectively, and a panel of insurer judges selected Nauto as the winner of Plug & Play’s insurtech expo late last year.
“It’s having the ability to measure risk holistically – combine driver, vehicle and contextual data and act as a prevention mechanism, so that insurers can move away from managing losses to preventing loss,” Sankaran explains.
Gareth Ross CHIEF CUSTOMER OFFICER, MASSMUTUAL
Since joining the insurer in 2008, MassMutual’s chief customer officer Gareth Ross has emerged as a champion for digitalizing his company, making it a leader in the life insurance industry.
Ross led the charge for MassMutual to embrace data science, culminating in the company opening a data science lab in 2015. He also championed the development of a data talent pipeline, partnering with local colleges to support education in the field and rewarding students with positions at the lab.
From that analytics-driven foundation, Ross keyed the launch of MassMutual unit Haven Life, which uses an algorithmic underwriting engine that leverages data, mobile technology and machine learning to help customers to get life insurance in a fully online experience, often without a medical exam.
It’s all part of Ross’s greater vision for the company. He believes that digital’s promise for changing the insurance industry comes down to providing a better customer experience.
“As a product, life insurance looks pretty much the same as it did in the 1950s, yet it’s how we interact that needs to continue to evolve,” Ross explains. “People now expect our customer service to be as prompt as Amazon’s, our results as quick and accurate as Google’s, and an interface as simple as Uber’s.”
Ryan Kottenstette CEO & FOUNDER, CAPE ANALYTICS
Ryan Kottenstette is no stranger to the transformative power of technology on established businesses. Before starting Cape Analytics, he worked at a venture-capital firm, Khosla Ventures. There, he saw the trend toward using artificial intelligence to revolutionize businesses like logistics and agriculture. Cape’s technology applies the power of geospatial imagery, computer vision and machine learning to extract and analyze property data that’s crucial to insurers. That allows insurers to shorten the application process and get real-time visibility into their reinsurance needs, all without having to send out additional manpower to get the information.
Louis Ziskin CEO & FOUNDER, DROPIN
Louis Ziskin started DropIn, a platform that allows insurers to use streaming video from drones and other sources in underwriting and claims. The offering has been praised by insurers such as State Farm for its flexibility and adaptability. That’s all part of Ziskin’s overall goal to improve the experience for all insurance stakeholders. “Typically when you improve the bottom line, it is at the expense of customer service, and vice versa. I saw the unique opportunity to improve the bottom line and customer service concurrently,” he says.
Brian Hemesath MANAGING DIRECTOR, GLOBAL INSURANCE ACCELERATOR
Great ideas need great visionaries to execute them, and that’s what Brian Hemesath did as director of the Global Insurance Accelerator. At once tasked with selling insurers on the value of insurtech, and selling insurtechs on the potential for Des Moines, Iowa, Hemesath has grown the number of participating startups, insurance company mentors, and notoriety of insurtech through each of the program’s three years. “We see the impact in [insurers] digital initiatives by introducing new partners that, frankly, would have never even made it onto their radar without the GIA,” he says.
Snejina Zacharia CEO & FOUNDER, INSURIFY
Distribution is one of the most-targeted aspects of insurance, but many technology companies have simply put a digital skin on the existing form-driven, agent-centered process and called it a day. Not so for Snejina Zacharia’s Insurify. The MIT graduate set out to re-architect the insurance agency from the ground up, using artificial intelligence, optical data recognition, and chatbots to give customers access to insurance products from Progressive, Safeco, and more than 30 other insurers in a fully digital experience from quote to bind. Earlier this year, Insurify created a chatbot for Facebook, allowing customers to buy policies on the social network’s chat application. “We are redefining the insurance distribution networks with carrier and agency partners,” she says.
Tim Attia CO-FOUNDER, SLICE
Tim Attia and his partner Ernie Hursh were among the few people who were undaunted by Google’s auto insurance aggregator, helping develop the technology that connected it to insurers at their previous company, Bolt Solutions. After Google shut down that aggregator, Attia and Hursh resurfaced in short order with Slice, an insurance company that provides coverage for the sharing economy. People renting their homes on Airbnb or similar services can purchase insurance for the contents of those homes on-demand, through Slice’s app, and if there’s a claim, can upload images through the same app to get paid quickly.
Michael Rudoy & Luke Cohler CO-FOUNDERS, JETTY
One of the ways insurance is changing through digitalization is through more value-added services. That’s the core concept behind Michael Rudoy (far left photo) and Luke Cohler’s renters insurance startup, Jetty. In addition to providing standard renters insurance coverage — updated to reflect the new realities of young professional urban living — the company also offers surety bond products to help renters pay security deposits and meet guarantor requirements. And it takes under two minutes to apply through the company’s online portal.
Scott Walchek CEO & FOUNDER, TROV
Way back in 2013, Scott Walchek took his “digital locker” idea to AIG and Fireman’s Fund and offered it to them as a benefit for their customers. Originally, Trov — pronounced like “trove” — alllowed policyholders to catalog their possessions online for easy remuneration in case of a loss. But as the insurtech industry continued to evolve, so did Walchek’s vision. Today, Trov directly offers insurance coverage, underwritten by Munich Re, for those possessions. The supplemental insurance protects customers’ most valuable items specifically, rather than bucketing them under other insurances like homeowners, renters, or auto, offering peace of mind around particularly expensive or rare items like instruments.
Sean Katz CIO, VITALITY
When South African health insurer Discovery first launched its Vitality program in 1997, it was simply a way to reward members for using gyms to stay healthy. Now, nearly two decades later, the program has been spun off and is working with several insurers to help quantify biometric data from wearable technology devices like FitBits and Apple Watches. Katz runs the technology department at Vitality in the U.S., working with partners like Manulife and John Hancock on unlocking the trends revealed by customers’ data and finding the right mix of discounts and perks to encourage healthy behaviors .
Mariel Devesa HEAD OF INNOVATION, FARMERS
Farmers Insurance is taking digitalization very seriously, and Mariel Devesa is leading the charge. A veteran of the company, Devesa has served since 2013 as head of innovation, with responsibility for not just coming up with new ideas, but anticipating broader cultural shifts that could impact the insurance industry. Under her watch, Farmers was one of the first insurers to offer insurance specifically for ridesharing drivers, in 2015. And this year, Devesa keyed the launch of Signal, the company’s usage-based insurance program that specifically targets distractions behind the wheel.
Farron Blanc VP, INNOVATION STUDIO, RGAX
In his role at RGAx, an in-house incubator that’s part of Reinsurance Group of America, Farron Blanc is tasked with identifying companies that can, he says, make insurance a “more delightful” experience. Since 2015, Blanc has led investments in five startups, the most recent being insurance social media platform Denim in April. But it’s Everplans, a digital archive that stores policyholders’ crucial documents for their loved ones to access after death, that he says, which sums up RGAx’s mission most effectively. “Traditionally, the industry views payment of a claim as having solved a beneficiary’s problem,” he says. “It’s about taking a wider view of a consumer’s life stage and creating an appropriate delightful journey to provide them with protection and peace of mind.”
Andrew Rear CEO, MUNICH RE DIGITAL PARTNERS
Munich Re is one of the most active insurers in supporting startups, and leading that charge is Andrew Rear, head of the company’s Digital Partners division. Digital Partners currently works with eight startups and intends to grow partnerships by at least 10 each year. It currently backs some of the most prominent insurtechs in the market, including Trov and Slice, providing financial backing for their nontraditional insurance products.
Greg Barats PRESIDENT & CEO HARTFORD STEAM BOILER
In his position as CEO of Hartford Steam Boiler, Barats has led the company’s commitment to leveraging the power of the Internet of Things for commercial lines. Under his watch, HSB has acquired two companies that make management platforms for connected devices: Meshify and Waygum. The carrier also provided the technology powering a model smarthome at sister company American Modern. Most recently, it partnered with Church Mutual to install smart leak-detection devices at several places of worship, which tend to have problems with older pipes that can freeze, burst and cause water damage or mold build-up. “This use of sensor technology provides an easy and effective way to help prevent losses and reduce the damage when a loss does occur,” Barats says.
Kuang Chen CEO & FOUNDER, CAPTRICITY
For life insurers, gleaning information from paper forms has been a challenge. Kuang Chen’s company, Captricity has emerged as a leader in document digitalization in that sector, not just with the actual conversion projects but also by making those documents searchable and applying analytics to the data within them to help life insurers better understand their customers and design products to serve them. Captricity’s platform is currently in use by 13 life insurers. “Now more than ever, insurers need high-quality, normalized data to deliver revenue-generating business insights,” Chen says. “unlocking the hidden value in customer data presents a unique opportunity to drive growth and customer acquisition.”