As any founder working in a regulated industry will tell you, the journey from idea to launch often ends up being a lot longer than originally expected. Most ideas seem so simple to create. It’s only when you actually try to bring something to market that you find the hidden roadblocks that make the original vision so difficult to achieve. As most headlines from the past year suggest (“Trillion dollar market!”, “Everyone’s retiring!”, “Revolution!”), insurtech offers a tantalizing opportunities for startups.
So, while we are busy preparing to launch our new renters insurance product in several new geographies (stay tuned next week!), we thought this was a good opportunity to share some lessons learned during our insurtech journey
- Working with the industry is key
Insurance is an old, large industry and there are many established players who sit in powerful places in the value chain. The 46 insurance carriers in the Fortune 500 have been around for 95 years on average. They are not just going away.
It’s important that new entrants in insurtech realize that they probably can’t do everything themselves. You will have to find partners or know more and have better access to capital, technology, distribution etc. This isn’t necessarily a bad thing, but it requires investing in relationships early on.
- Focus on the “tech” in insurtech
There are currently many debates in the insurance industry about the best distribution strategies, the need for different products, and other topics. But one thing that no one disagrees with is the fact that technology in the industry is lagging. The extent to which the industry still relies on aging technologies like faxes, pdfs, and desktop applications is staggering. While there are many reasons for this state of affairs, innovating in insurance will require technology improvement first.
- Insurance is not a trillion dollar market
Claiming that insurance is a trillion dollar industry is like claiming that your startup has 300 million potential customers because you started it in the United States. The reality is that insurance is made up of hundreds of different billion dollar industries. Renters insurance has very little do with large commercial insurance, which has very little to do with life insurance. Each of these “mini”-industries has unique distribution, product, and underwriting challenges, as well as varying degrees of need for innovation. Entrepreneurs should think carefully which insurance sectors are worth confronting before embarking on the journey.
We are excited to be part of the group looking for new solutions in the insurance industry and hope some of our lessons learned can help others.
Look out for more exciting news from us in the coming weeks!
Learn more at www.bungalowinsurance.com