The breakout session on fintech and insurtech was hosted by Russ MacTough, managing director of Liberty Mutual Strategic Ventures, the corporate venturing arm of the US-based insurance provider.
In his talk, MacTough presented data on overall trends in fintech and insurtech investments over the past few years.
He also dedicated part of the session to explaining what insurtech actually means – describing it broadly as any technology that helps streamline various internal business processes within insurance services, be that agent and broker systems or carrier systems.
MacTough said: “Savvy entrepreneurs and investors have built huge business over the years selling into this slow adopting, gigantic market.”
He further stressed that, though it has been around for a long time, insurtech had remained below the radar of Silicon Valley investors until fairly recently. Taking a value chain perspective, he described some companies in the field as old school players, “typically big businesses which have been selling large footprint enterprise software licenses to insurance carriers for years”.
The new wave of insurtech companies, in turn, has been heavily, albeit not exclusively, centered on what can be digitised outside insurance carriers.
He also pointed out that there are a lot of issues that startups in the field often face due to lack of insurance expertise among entrepreneurs.
Another stumbling block is the reticence of insurance carriers to place data in the cloud and share their data. MacTought pointed out that large insurance providers are interested in new ways to improve customer service, so there are many opportunities for applications that improve customer acquisition and retention.
The subsequent interactive discussion with the audience considered rise of the internet of things, smart homes and smart cities and their implications for insurance providers.
At the current juncture, insurance companies are up against a number of important practical question marks for the foreseeable future: what would be the most efficient way to place data-gathering devices in people’s homes and, if that is possible, what are the implications for underwriting, how would data-gathering insurers deal with the replacement cycle of such high-tech products, and so on.
Finally, MacTough and other corporate investors from the audience discussed the potential role of corporate venturing arms as a bridge between startups and large insurance companies in terms of data sharing. While this is not necessarily always the case, as MacTough said, corporate parents in the sector are a great bet for startups whose technologies or services need guidance and help on regulatory matters.
