We recently exchanged thoughts with Ryan Hanley who answered some of our questions regarding the state of the state of insurtech.
Ryan is part of our 50insurtech online influencer list which we update on a monthly basis. His current roles at TrustedChoice.com as SVP of Marketing and at Agency Nation as Managing Editor make him an expert in helping insurance agents grow their audience and their business. Ryan has been teaching the business of inbound and content marketing since 2009 through writing, workshops and keynote speaking. Connect with Ryan on LinkedIn.
Ryan, in your opinion which technologies will have the biggest impact on the insurance industry in the next couple of years?
World changing technologies, such as autonomous cars and blockchain are still 5+ years out from having a significant and widespread impact on the US insurance market (though I do believe each will take incremental steps in the period). In the near term, I see telematics, in particular in the property market, such as Roost Labs, creating substantial change in the way insurers evaluate risk. Most insurtech thought-leaders are looking at telematics in the auto market, and there will be substantial change there as well, but most insurers/reinsurers already see this coming. The "Rogue Wave" as you might call it is the reduction in loss dollars paid due to preventative technology in the property telematics space.
How important is it for an insurance technology startup to be able to clearly explain their product/service to potential investors, partners and customers ?
Insurtech startups must be storytellers as much as they are creators. With the pace at which technology can be developed in today's marketplace, slick tech and good idea are a dime a dozen. It's the startups who can sell their vision to stakeholders that win.
What are the main challenges faced by InsurTech startups in this moment?
The first answer that might come to mind is obtaining money, but with over $1.6B invested in insurtech (reported by CB Insights) in 2016, it would seem that obtaining money certainly is NOT a problem. Therefore, we must look to the two problems insurance providers, traditional and insurtech, have faced for the last two decades, regulation and commoditization. Despite slick tech, a driven team and piles of investor capital, many of today's insurtech darlings will be dashed against the harsh realities of insurance marketplace.
The insurance industry has entrenched regulation at both the local, state and national level, which unlike taxi regulation in the case of Uber, is not easily sidestepped. This regulation purposefully slows the pace of growth, which is often not baked into investor projections.
Direct and captive incumbents, through billions in advertising, have created a commoditized perception of the personal lines insurance product (particularly auto insurance). Self imposed pricing pressure reduces margins and increases cost of acquisition. Neither of which are advantageous for an insurtech startup.
Do you think that the main drivers for innovators are insurance companies or insurtech startups and why?
The answer will lie somewhere in the middle. Legacy insurance companies are often too big and slow moving to innovate at the pace necessary. While insurtech startups, for the reasons listed in question number three, need partners who can help them navigate the treacherous waters of the property/casualty insurance market. Therefore, I see many more marriages between insurance companies and insurtech startups in the future. The trick for both sides will be finding the right partner at the right time.
If you would have the chance to create your own insurtech startup what would it do and how would it be useful for the customer?
Though I'm not technically the founder or CEO, I very much view TrustedChoice.com and Agency Nation as my own insurtech startups. Both work in service of the independent agency channel. As a former independent insurance agent, I believe in the value derived by insurance consumers by working with an independent agency. Insurance needs a human connection. The work we do at TrustedChoice.com and Agency Nation is two-fold. First, create technology which connects insurance consumers with the right independent agent, at the right time. With do this through a proprietary algorithm called, "The Appetite Engine." This helps local independent agencies pool resources and scale their value online across channels, driving brand awareness and new inbound sales opportunities. Second, we provide education and resources to help independent agents adapt to the digital marketplace. We call this, "Digitizing the soul of your agency."