In practice, if the goal is to
sell your life story to 21st
Century Fox or Paramount Pictures, all publicity is good publicity. In
reality, this is rarely true,
especially for an industry
as risk-averse as insurance.
Unfortunately, the reasons
insurers appear in the
news typically smack more
of gaudy tabloids and
made-for-TV movies than
of good old-fashioned
blockbusters.
Even though the
insurance industry is built
on the noble principles
of inclusion, equitable
distribution of benefits,
community, and the protection of life, limb, and
property, the emotional,
sad stories that often
accompany instances of
unpaid claims, inequitable
underwriting, and unclear
policy exclusions rarely
win insurers new customers or influence investors
in a positive way. Coverage of negative insurance stories is so
prolific, in fact, that it makes it difficult for feel good stories
about the industry to bubble up.
Admittedly, the reason for the recent media spotlight on
insurance caught many industry insiders off guard, but it is
decidedly positive, leading insurers and investors alike to nearly
trip over one another in the run toward insurtech. The almost
exponential increase in insurtech deal flow has eliminated any
wonder about whether it is possible for insurers to wait out the
trend, to avoid engaging by sticking one’s proverbial head in
the sand until things blow over. Discussion now centers around
how the old and new will work together, or not, to create a truly
new insurance paradigm for the future.
While some insurtech firms will naturally target compe-
tition instead of partnership, S&P Global Ratings expects in-
cumbents to avoid being overrun by startups due to the strong
barriers to market entry, including the industry’s high-degree of
required regulatory compliance, and the amount of capital nec-
essary to launch a new insurance company. S&P Global Ratings’
The New Yellow Brick Road
Insurtech paves a new route for insurance companies to travel.
By Jennifer Overhulse
The almost exponential
increase in insurtech deal
flow has eliminated any
wonder about whether it is
possible for insurers to wait
out the trend, sticking one’s
proverbial head in the sand
until things blow over.
