Ismail Ismail, MD of Compass Insure tells us why InsurTechs have benefited everyone in the insurance value chain including the insurer and specialist partners. This is as Vaai.co; a new InsurTech underwritten by Compass Insure launched this week.
Compass insure has partnered with a number of InsurTechs over the past five years. What’s the thinking in doing this?
Have you heard of disturbance as an ally? InsurTechs, in disrupting the sector, have brought a new energy into the industry. Anyone who’s worked in insurance for over five years will tell you that there’s suddenly a whole lot more happening here. Their ability to find gaps in the way we do things and take risks on new tech has changed the way we all think about our businesses.
Of course, it’s always the hope that one of our InsurTechs becomes the ‘next big thing’, at least on the continent. But whether they do or they don’t, the process still adds value for everyone in the chain. The early-stage business cycle of InsurTechs plus their natural agility means they explore and filter out products and processes that could and can’t work. For businesses with established cycles; attempting to do this internally is expensive and time-consuming. Should we not all be open to the outside-the-box thinking that InsurTechs offer, whilst also giving these entrepreneurs an opportunity to market?
What do you know now, that you wished you’d known about start-up InsurTechs five years ago?
We now know that a new entrant into the market faces challenges. For any start-up out there, it’s that age old adage: ‘It’s going to take longer than you think and be harder than you thought.’ Once the product goes to market, the market shows up the gaps instantly.
One of the big learnings is to move beyond a focus on a fresh and accessible product to an equal focus on the back-end processes, like how the InsurTech can make the claims process robust, whilst still accessible.
I believe we’ve also seen a shift in the mindset of InsurTechs as they mature – from innovation-focused to business-focused, which means being more flexible and adaptive. But their influence in changing our fixed mindsets as the carrier is also evident. Although, I admit ruefully, that the InsurTechs are unlikely to think we meet their standards of flexibility quite enough!
So, Compass Insure partners with both UMA’s and InsurTechs? What is your one wish for UMA’s right now?
In the past few years, we’ve seen a distinct shift in how the executive teams at our specialist partners think about their businesses. Signs of growth and innovation are exciting. The recent Covid-induced challenges has allowed UMA’s to explore decentralised platforms, develop greater capacity for digital data processing and virtual sales models. We are very supportive of UMA’s thinking differently about their businesses.
And your one wish…?
Well, this is not a new song. But I’m going to say data collection and application. The insurance sector has always collected data – it’s the basis of assessing risk. But we need to use what’s now available to us to do this in clever ways.
The fact is this is already a very present feature in the specialist insurance landscape. Apps that track usage or sensors that detect and warn of damage to property etc are already reducing claims in certain portfolios. Vaai.co uses a data logger to track client usage and assist with claims process, whilst some underwriting agencies are exploring the use of sensor installations and IoT to monitor maintenance on equipment and contain damage.
Smart ways to collect and harvest data – even helping the client manage their risk – that’s where our heads should be at.
Google’s recent announcement of its intention to invest significantly in developing insurance applications, along with its recruitment of international insurance heavyweights indicates just how non-negotiable the ability to harness data will be – at every level of insurance. Let’s underline that! Every level of insurance – from loss adjusters to brokers to the insurer. None of us can abdicate responsibility for this. The quicker we get better at it – well, the better for us.
What are you observing on the international Insurescape?
Definitely less adversarial and more collaborative. We’re seeing more InsurTechs being acquired by incumbents with global expansion plans. Aon’s acquisition of Coverwallet and its subsequent expansion into several territories is one of many examples.
The insurance sector is an expensive business and ‘good paper’ is essential to the integrity of the sector. Yet the innovation that InsurTechs bring to the table and the business principles that drive them – agility, customer experience, process automation and smart data – is the stuff that is already shaping the way in which we do business. How we integrate and learn from the InsurTech experience in our eco-system is the only question.
What’s the coolest thing about insurance right now?
I think it’s a good time to be in the sector. There’s so much happening in insurance right now! I don’t think we notice the many ways in which we’ve adopted new ways of working.
For better or worse – we’re now in business unusual. This is not only because of the pandemic but because of the natural business cycle of the sector. The fundamentals will stay the same – solid paper, good underwriting and collaborative partnerships (especially in specialist insurers). There’s ample room for growth – for InsurTechs but also for traditionally designed UMA’s. We now have the chance to explore possibility. If we do it right in specialist insurance, rather than becoming legacy businesses; we have the opportunity to create a footprint for tomorrow. Is that not the ultimate legacy?
For more information on Vaai: https://vaai.co/