Tech startups in the insurance industry have grown exponentially and have brought fresh ways to think about efficiencies in insurance.
Leader’s Edge caught up with Dawn Miller, commercial director at Lloyd’s, to discuss the latest tech innovation happening in the industry and at Lloyd’s Lab.
Q
Insurtechs have gone through some transformations since their initial appearance, and there seems to be a new wave of insurance startups. What kind of innovation do they bring now?
A
Over the last 10-15 years, we’ve seen the advent of all kinds of new technologies coming into the insurance industry from areas such as health tech, food tech, and other kinds of fintech. These technologies are often trying to solve individual problems within the delivery of a product, or the provision of a service, or even better data analytics. What strikes me is that all these different types of innovation are focused squarely on improving customer experience while addressing protection gaps. This customer focus is, in my view, the driving force behind the best innovation, and it is leading to new products and services that improve outcomes across our industry.
Q
Where is the opportunity for Insurtech?
A
We’re seeing situations where many startups are developing the “software-as-a-service (SaaS)” model. For example, entities that provide restaurant booking services may see an opportunity to bring additional services, like insurance, into their offerings. So, an app that helps you to book travel, or a hotel or restaurant, can also include insurance features that add even more value for the customer. On-demand insurance such as this is a very uncomplicated way for businesses to help their customers and to protect them. Think of the crypto-currency wallet company that can offer an insurance product to protect a customer’s digital currency against online theft. We’re seeing more creative ways to bring insurance products into the marketplace in this way. It is an enhancement and at times a move away from from the typical distribution mechanisms.
Q
Where is the opportunity for incubators, like Lloyd’s Lab?
A
For tech accelerators and incubators, like our Lloyds Lab, there’s a tremendous opportunity to provide a framework for tech startups, and more established firms, to come together and to work together. Aggregating entities to create broader and more comprehensive solutions provides us with a unique opportunity to tackle some really thorny issues for our clients and to help close the protection gaps that we see (such as with intangible risks, like cyber, or climate related concerns).
What we hope to do at Lloyd’s Lab is to create an incubation environment where insurtechs that come in—some start-ups, some more mature—can physically test their products, succeed or fail, innovate, and ask questions in a very safe environment. We are evolving the program into a “Lloyd’s Lab 2.0” by shifting our cohorts to be squarely focused on product. And to concentrate on the many protection gaps that we see.
Q
What does long-term innovation look like for Lloyd’s Lab?
A
In the long-term, my aspiration is for Lloyd’s Lab to be considered a global home for innovation, leveraging our convening power to drive a sense of community, purpose and intent, similar to our how our iconic Lloyd’s underwriting room represents shared risk, entrepreneurism and progress. We currently do this by providing the framework, facility, and brainpower behind the accelerator. But we’re looking at different strategic partnerships where we can continue to support our cohort members before and after they’re part of the Lab. One way to draw in new talent, for example, could be to build an education platform—a “Lloyd’s University” if you will.
Another way is to link with other accelerators, universities, or departments from other insurance firms—like risk management, data analytics, or disaster recovery departments—to allow those insurtechs to develop and test their products within the Lloyd’s ecosystem.
Additionally, can we use the convening power of the Lloyd’s Lab to drive a crowdfunding effort. Imagine having insurtechs pitch on the floor of our underwriting room, allowing entities within the market with the opportunity to invest.
Q
Lloyd’s Lab Cohort 9 was recently unveiled. Tell us more about this year’s insurtechs and some changes to the program.
A
Going back to our initial discussion, we’re focused on solving customer problems. And we must be purposeful about the insurtechs that come in to the Lab. So we’re looking for very specific items that will help the market to develop new products — some early, others in the medium and long-term.
When it comes to this year’s Cohort 9, we’ve looked at the applicants with a specific goal in mind: how do we take a software-as-a-service that’s related to another industry and put an insurance lens on it? Another exciting aspect is to see the different kinds of people and personalities that are now coming into the insurance marketplace from other industries. In fact, many established fintech companies are trying to put an insurance wrapper on their offerings. So, while they know their business well, they often lack the specialist insurance expertise. That’s another way that the Lloyd’s Lab provides added value, facilitating access to risk seeking capacity, and clearing the way for tomorrow’s solutions.
