Fostering Startup Success at InsurTechNY
Insurtech startups and insurance carriers: they’re the perfect combo. Startups love the budgets, distribution and big brand cred of the major insurance carriers. Plus, they can hone their tech in a real-world environment and maybe even find a nice exit. Carriers crave the startup moxie and tech improvements that insurtechs can bring.
If it’s the proverbial match made in heaven, dancing with insurance stars can be challenging and frustrating for both sides.
InsurTechNY’s December meetup featured two great panels that covered just about every aspect on partnering for success, from those who have lived through it, covering the mechanics of POCs (proofs of concept), selecting the right partners, managing the process, and covering the HR and legal angles.
It was a great crash course in helping gazelles and elephants cut up some rug together without stepping on each other’s toes.
Read on for the details; but first, on a side note, let me say how happy I am to have discovered InsurTechNY. David Gritz, Tony Lew and team do a great job, bringing people together from across the industry. Each event offers the opportunity to make great connections and learn from the panels and content presented.
Fusion PR does much work in the space. We are headquartered in NY, although our clients come from all over. But it is good to know more about the thriving insurtech ecosystem right here in our backyard, and InsurTechNY is a key part.
This meetup focused on improving collaboration and results between insurtech startups and those who can make a big difference in their success, namely carriers and brokers. It featured two panels, which shared startup and carrier perspectives, respectively. Below I feature a small sampling of the great insight provided by the panelists. Check out the video to see the entire session.
Panel 1: Magic formula for Proofs of Concept
- Dawn LeBlanc – Managing Director, Hartford InsurTech Hub powered by Startupbootcamp, which connects the expertise of leading insurers, investors and mentors to innovative startups.
- Zander Steele – Director of Enterprise Sales at HyperScience, a company that transforms insurance document processing with machine learning.
- Olek Shestakov – CEO and Chairman of Livegenic, a claims platform used in four continents with 20+ carriers.
David Gritz moderated the session, and started by asking the panel to explain proofs of concept vs. pilots vs. commercial implementations.
It’s important to get everyone from the carrier who needs to kick the tires on a tool in the same room… POCs can be formed in different ways… always try to build one in steps…
Make sure the process to enter the organization is clearly defined; do not pass go if you don’t have this. Ask the carrier: “what would a positive outcome look like for you; how can I show that with this project?”Dawn LeBlanc
A POC is about the cultural fit, and optics, not just technology
There are three potential pitfalls: selecting POC objectives; if you don’t set the right ones in the beginning, it is tough to change course later… is it measurable, easy to explain? Selecting the POC team; and setting up the right communications process at the beginning.Oleh Shestakov
Try to get business and tech alignment up front; frame it as “If we check these seven boxes is there a path to doing biz together?”Zander Steele
On finding the right champion
Find the person who directly feels the pain of the problem we’re solving; they should have significant influence and be someone who can sell effectively on our behalf.Zander Steele
From POC to commercialization
If objectives that translate to success are defined at the beginning, then there’s less of a chance that [the POC] falls off a cliff. We advise carriers, if you’re not interested, just be honest, If you’re a startup, try to understand why it’s a no.Dawn LeBlanc
Don’t be afraid of procurement; Involve them early, ask who we should be working with.Zander Steele
Panel 2: War Stories Working with Startups
- Victor Dan – Director of Strategy at Prudential, Strategy, and M&A expert. Victor oversaw the $2.35B acquisition of Assurance IQ.
- Megan Protas – Director of New York Life Ventures, which has made 40+ investments and 100+ POCs since 2012.
- Daren Moreira – Partner at Eversheds Sutherland, advises clients on regulatory compliance, insurance and reinsurance transactions and corporate governance.
- Brian Gilman – VP of Solutions Marketing, responsible for the go-to-market vision and strategy for the Vonage Business portfolio.
Insurance industry veteran David Bradford moderated the session.
Selecting the right startup
It starts with a strategic planning process, and defining problem statements: what do we want to solve?
Divide Into “food groups”: do you want to enable distribution, accelerate technology, focus on customer experience? Then you try to match problem statements to solutions that come from insurtech and fintech companies. If they can address the problem statement need in a crisp way, the faster the conversation goes.Victor Dan
What criteria do you apply?
When a company acquires or invests in a joint venture with the startup, they’re buying the entrepreneurial spirit, the vision, technical expertise.Megan Protas
Startups and carriers approach it from very different places; for the startup is it their whole world, their number one priority is to see the project become successful.Daren Moreira
How to assess the viability of early stage company
It’s a little different than for more mature companies. It starts with strategy, does theirs fit well with ours? How do their capabilities fit? Can we work together to address a larger market or do things faster?
When it comes to financials, we are trying to understand how the company will evolve when we become partners. Would the customer funnel expand? What’s the conversion rate once they become part of Prudential? Great concepts need a brand behind them; life insurance is all about trust.
Being able to assess those metrics first, before looking at income statements and book value is very important to get a picture of the startup.Victor Dan
Discuss best and worst engagements
At NY Life, we are excited about startups that are solving a problem that has never been tackled with tech before. An example we are proud of is Vault, formerly known as Student Loan Genius. It’s a company that helps employers provide employees with student loan repayment programs. We are proud that our benefits team is taking that initiative to help support our employee population.
Hire an attorney that knows the product… In addition, there’s nothing more frustrating than insurtechs not caring about their own insurance coverage.
As much as it’s important for companies like NY Life to understand a startup’s sales cycle, it’s equally as important for startups to recognize the incumbent’s sales cycle.Megan Protas
We are at the crossroads of build and buy for insurers, who use communications providers to build mobile or desktop apps.
Our visual APIs power the top ten insurers; remote visual inspection solutions.
Make sure startups are looking holistically at the communications stack for adoption and utilization of a solution between customer and provider.Brian Gilman
How important is executive sponsorship?
It’s critical; 9/10 times the tech works. You must get over that hurdle of what you’re trying to accomplish. It’s about finding what the end game is going to be for inviting a champion. Once you identify the executive where it is a win, things move faster.Brian Gilman
There’s no implementation without a business unit sponsor.Megan Protas
Entrepreneurs underestimate regulatory hurdles – how can the carrier smooth the way make process easier for startups?
You must devote resources (personnel or funding) to projects. The carriers who struggle the most try to take people who have a full time job not working in the tech space – tag on an hour a day, to try to help startup launch – what happens is emails go unanswered for weeks, it dies on the vine.Daren Moreira
What about the team, and financial side?
Founders of startups are equally as important if not more than the product. We look at their backgrounds, experience. Have they had exits? Do they understand the pain points of your business?Megan Protas
How can startup determine the best carriers – and how to approach them?
Be aligned with the mission (not the same as culture or strategies). Have same purpose. Look at mission statements. Startups should find carriers that share the vision.
There are things we want to change based on the culture we see at a startup; e.g. how to make decisions.
Assurance IQs Chief Strategy Officer said they don’t pend a lot of time debating. It’s different than what we do, we have meetings, we debate. They measure, cut, measure.
Find out what kind of culture the carrier wants to aspire to. If your startup has that culture, e.g. moving with speed, testing and learning, it’s appealing to a carrier that wants to fix things.Victor Dan