On this episode of The Insuring Cyber Podcast, two InsurTech CEOs shared their perspectives on InsurTech’s role in the insurance industry, and both agreed that disruption was never the goal.
Rob Schimek, CEO of bolttech, and Rick McCathron, CEO of Hippo, were both speakers at the annual Insurtech Insights conference held earlier this month in Manhattan. They spoke with The Insuring Cyber Podcast from the conference about how they see InsurTechs as partners and enablers to help modernize the insurance industry. In fact, McCathron said he’s always been offended by the term “disruptor” when describing what InsurTechs do.
“I’ve got 30 years’ industry experience, and I actually take offense when I hear InsurTechs calling themselves disruptors because when you say you’re disrupting somebody or something, that makes it almost sound like you’re calling somebody’s child ugly,” he said. “It’s just the wrong thing to do.”
Instead, he said that Hippo works to partner with insurance companies to bring consumer expectations to the forefront of the industry and introduce new technology that can help drive insurance forward.
“This industry is very much about partnerships,” he said. “You look at almost every partner we have, and it can be argued that they’re a competitor of ours too. And so we sell lots of other insurance companies’ products, and many other insurance companies sell our products. So partnership, I think, is key.”
Schimek agreed.
“If everything you do is disrupting, then you are a threat to everyone around you,” he said. “And it’s not the best way to run a business, to have everyone view you as a competitor or as a threat. Instead, a far better way to run the business is to have everyone view you as a potential partner, a potential enabler to their success.”
His advice for InsurTechs that are aiming to do this is to maintain discipline and focus on solving a specific problem for the industry.
“You can’t be out there trying to do everything for everyone,” he said. “What problem are you really trying to solve?”
McCathron also reminded InsurTechs that the term is made of two words – insurance and technology.
“You have to have equal energy and emphasis and pedigree in both,” he said. “You can’t ignore the underwriting and claims handling and the rate making and pricing, just like you can’t ignore that there’s a customer at the end of this process, and you have to have an experience that customers gravitate towards.”
He added that as InsurTechs seek to partner with insurers to improve the customer experience, they should also be partnering with each other in order to strengthen an industry that he says is ripe for transformation.
“InsurTechs are generally painted with the same broad brush … the perception is that they’re all the same,” he said. “And so I think it’s really, really important for InsurTechs to recognize, ‘Let’s work together. Let’s partner together. Let’s work with the incumbents in the industry to build a better outcome for our customers.'”
This is important advice, McCathron said, particularly as InsurTech is facing challenges right now.
“This is a difficult time for InsurTechs. Those of us that started six, seven years ago had very different challenges. Ours were trying to prove to VCs (venture capitalists) that InsurTech is an investible business, and we were successful in doing that,” he said. “But things like reinsurers or carrier partners, they were enamored by the concept of InsurTech and they were willing to support you very early on and really bought into the longer term vision and view.”
As macroeconomic factors have shifted, however, the ability to become profitable and gain investments quickly has proven to be more of a challenge for new startups, he said.
“So now that brings us to where we are today, which is if you’re a startup InsurTech, it’s really, really hard to get investment dollars and it’s really hard to get risk-bearing partners on the reinsurance side.”
Schimek said with this in mind, the idea of collaboration is vital for the future of InsurTech.
“[At bolttech], we would encourage everyone to think about this idea of cooperation and collaboration and ecosystems. When I went to graduate school, we used to have a phrase that we would say, which is, ‘You’ve gotta cooperate to graduate.’ I feel the same way about success in this industry,” he said. “If we’re going to really graduate together into a really successful future, we have to cooperate with one another. We have to work together.”
Check out the rest of the episode to hear what else Schimek and McCathron had to say, and be sure to check back for new episodes of The Insuring Cyber Podcast publishing every other Wednesday along with the Insuring Cyber newsletter. Thanks for listening!
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