Table Of Content“The insurance industry talks a good game about InsurTech but the follow is still so last century. But InsurTech is changing that. Shifting the focus away
up or delivery isn’t always there. But it needs to be as this great profession of from legacy operations, Insurers are adopting new tech and innovative ways
ours is facing a genuine existential crisis. Our traditional ways of working and to engage digitally with customers and their ecosystems. The InsurTech Book
servicing our customers are becoming increasingly irrelevant. The insurer that is the first, definitive compendium of the rapid evolution that is touching every
will survive in the long term is the one that behaves more like a retail business; aspect of this global insurance industry. It’s a must read for anyone remotely
pre-empts consumer demand; interacts with customers in the way they want; interested in technology enabled insurance.”
and views innovation and tech as an opportunity rather than a threat. So it is Rick Huckstep, Chairman, The Digital Insurer
encouraging to see so many people engaging with the necessity for change in
this book. There are many views, opinions and priorities laid out here and it is “This book is a much awaited cornerstone to holistically connecting insurance
that debate that we need to bring out of print and into our daily conversations and technology. The bar is raised and a cogent precedent is set for all the
and thinking.” existing and upcoming professionals globally, that this era is the era of
Amanda Blanc, Group CEO, Axa UK InsurTech. A must read.”
Nameer Khan, Digital Strategist
“InsurTech is on the brink of changing our industry, from the inside and the
outside. Never before has it been more important to understand the ideas,
“The wealth of ideas, the creativity, the new ways of working that
trends and drivers behind the insurance digital revolution. The InsurTech Book entrepreneurs bring to the table, whether they come from the world of Tech
has a big role to play in helping us build our knowledge base and expand our
or Insurance, is truly inspiring. Over the last few years, I have been in the
sense of the possible. So much of ‘the future’ is already with us in some shape
front seat to witness how such partnerships can transform the industry – and
or form and this book will help us build our understanding of our fast-changing
it has been an exciting journey though it is only just starting. To keep moving
insurance world.”
forward and lead change, we have to publicise the work InsurTech experts
Huw Evans, Director General, Association of British Insurers are doing, along with insurers. We need to tell their stories and that of their
ideas. We can’t possibly talk enough about what’s currently happening
“In a sector with intense pressure on turnover and margins, and with hungry
in our industry and this is why I welcome this book, a set of articles from
new players capitalised and circling ready to seize new opportunities, legacy
the very minds that are making it all happen. This book will interest some,
insurance sector players are more oil tanker than yacht. Insurance is an
inspire others and undoubtedly will scare more!”
industry where players must ‘get fit or fail’, but fitness cannot be surface deep –
Paul Jardine, Chief Experience Officer, XL Catlin
an oil tanker can’t simply morph into a yacht by attaching a sail to its funnel. The
industry must seek, embrace and absorb change. Opportunities for competitive
“This fantastic InsurTech book brings together some of the brightest global
advantage can be brought to life by blending data from otherwise unthinkable
insurance and InsurTech minds to share some of their best thought-provoking
sources which can be collectively massaged to provide underwriters with
ideas and proposals. If you allow those ideas and proposals to open your
a richness of knowledge only dreamed of before. Predictive analytics can
imagination, these authors can magically bring great new thoughts to infiltrate
fuel predictive risk control and, in turn, predictive underwriting – calling the
your company positively and help take it to the next level. My recommendation
fire brigade before the fire has started, allowing insurers to manage risks
is to let change and new ideas happen because the insurance industry is
proactively as never before. This book will challenge, and make you think.”
about to transform in a way that will render it unrecognizable in a few years’
Julia Graham, FBCI, FCII, Chartered Insurance Risk Manager;
time. These great InsurTech authors can help guide and inspire you through
Deputy CEO and Technical Director, AIRMIC
these fantastic times to come; they certainly inspired me to think further into
the future.”
“Insurance has finally woken up! It’s been 2 decades since the birth of the
Spiros Margaris, Venture Capitalist and Advisor
Internet and yet the one industry the global economy could not operate without
“This important book explores InsurTech, from its definition and its current InsurTech. This book guides you, in a very smart way, through different aspects
status to its future impacts. While many have predicted a digital revolution, new of InsurTech and prepares you for the future trends.”
programming routes such as blockchain (supporting and enhancing trust and Sylvain Theveniaud, Allianz Accelerator, Founder and MD
the ability to fully use and apply data) have transformed the financial services
sector in ways that most people are unaware of. The insurance industry “In 2014 through my work at AXA, I realized that there was a new market emerging
has embarked on a process of radical transformation through creativity and called InsurTech, and called it as such. Three years on, the most innovative ideas
sustained digital innovation, with great potential for rapid business growth – or in InsurTech are still at seed stage because InsurTech investing is still in its earliest
for company failure. Only those able to grasp new opportunities will be able days, or 2 to 5 years behind Fintech in terms of timeline and investing trends.
to reshape their mission and business model to take advantage of InsurTech Despite suffering from an early stage equity gap, InsurTechs are continuously
innovations. That is why this book is an essential read for those leading, coming to market with very interesting products, platforms and propositions to
managing and working in the industry and those studying to enter it, if they are address fundamental issues within the fabric of Insurance, enabling insurers to
going not only to understand these far-reaching industry changes but also to partner and enter new markets. For those of you still wondering why InsurTech is
be part of them.” happening right now and looking to grasp some of the key trends affecting the
insurance industry, I would urge you to read this book.”
Professor Lynn Martin, Entrepreneurship and Innovation,
Anglia Ruskin University and Founder, HRI Minh Q. Tran, Managing Partner and Co-Founder, Proptech Capital
“By 2020 we estimate that the percentage of insurance customers interacting “Insurers and the whole insurance value chain has woken up to what digital
with carriers through digital platforms will double to 80%. Clearly, insurers must related services and products can do for them and their customer. However,
embrace digitization to extend capabilities and address this future inevitability. this desire for change has not permeated through to all layers within insurers
I strongly encourage you to read this book and prepare for the future digital and significant resistance remains to changing processes for new product
inevitability. It will give you insight into strategy, process, organization and development, new partnerships, new claims methods, and new data
technology imperatives to support improved positioning.” techniques. While this is understandable in that no-one wants their cozy lives
disrupted, the reality is that there is no alternative. It really is, adapt the new
William Pieroni, President and CEO, ACORD
or face an uncertain or terminal future. This book outlines, from a variety of
“I had the pleasure of partnering with the Startupbootcamp InsurTech perspectives, the nature of these changes. It provides a broad primer for those
Accelerator and to run a number of mentorship programmes and events. There’s who are central drivers of the needed changes but also a rallying cry to get on
something truly rewarding about having tech folks and insurance experts around with the job. Insurance is lucky in that it does have money and the capability –
the table. This book takes you through the journey of some of the projects that all it lacks is time. This book is all about ‘hurry-up’.”
are currently shaping the InsurTech scene and I am certain that you will, while Rob Wirszycz, Executive Chairman, Questers Group and Chairman, RightIndem
reading it, experience that excitement and feel inspired to innovate.”
“InsurTech is rising and will irrevocably transform the insurance industry,
Hélène Stanway, Digital Leader, XL Catlin
forcing incumbents to adapt. But to adapt we first need to know and
“For many years, the insurance industry has remained at a standstill. understand the ecosystem – which is why The InsurTech Book is required
InsurTechs have appeared out of the blue and are revolutionizing the way reading. Ecosystems matter. Partnerships are the key. It’s the future of
insurance companies work. The rationale behind such a change is based insurance. The book understands that the InsurTech startups are the
on major drivers, including the advent of new technologies and evolving agent of change needed in transforming our business models. For me, the
consumption patterns and customers’ needs; requesting real-time and interoperability of the incumbent is key, both the interoperability of the tech
on-demand ways of doing things. Insurance learns very fast and will certainly, stack but also the interoperability of our industry’s talent.”
in the near future, reshape and transform itself as the new standard of Zia Zaman, Chief Innovation Officer, MetLife Asia
The InsurTech
Book
This edition first published 2018
© 2018 FINTECH Circle Ltd
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Library of Congress Cataloging-in-Publication Data
Names: VanderLinden, Sabine, editor. | Millie, Shân M., editor. | Anderson, Nicole, editor. | Chishti, Susanne, editor
Title: The insurtech book : the insurance technology handbook for investors, entrepreneurs and FinTech Visionaries /
edited by Sabine VanderLinden, Shân M. Millie, Nicole Anderson and Susanne Chishti
Description: Chichester, United Kingdom : John Wiley & Sons, 2018. | Includes index. |
Identifiers: LCCN 2017057073 (print) | LCCN 2017059018 (ebook) | ISBN 9781119362241 (pdf) |
ISBN 9781119362203 (epub) | ISBN 9781119362210 (pbk.)
Subjects: LCSH: Insurance. | Insurance—Technological innovations.
Classification: LCC HG8051 (ebook) | LCC HG8051 .I6165 2018 (print) | DDC 368—dc23
LC record available at https://lccn.loc.gov/2017057073
A catalogue record for this book is available from the British Library.
ISBN 978-1-119-36221-0 (paperback) ISBN 978-1-119-36224-1 (ePDF)
ISBN 978-1-119-36220-3 (ePub) ISBN 978-1-119-44456-5 (Obook)
10 9 8 7 6 5 4 3 2 1
Cover Design: Wiley
Cover Image: © pkproject/Shutterstock
Set in 10/13pt Helvetica LT Std by Aptara, New Delhi, India
Printed in Great Britain by TJ International Ltd, Padstow, Cornwall, UK
The InsurTech
Book
The Insurance Technology Handbook for Investors,
Entrepreneurs and FinTech Visionaries
Edited by
Sabine L. B. VanderLinden
Shân M. Millie
Nicole Anderson
Editor in Chief
Susanne Chishti
Contents
Preface viii Disrupting Car Insurance – Drivies App Makes Driving
About the Editors xi More Fun, and Insurance Fairer 75
vi
Acknowledgments xiv Genomics 101 – The Search for a Better Life Expectancy
Predictor Leads GWG Life to a Science Lab 80
s
t 1. What is InsurTech?
n
e
t
n 4. Internation alizing InsurTech
o InsurTech Definition as Its Own Manifesto 6
C
Why is Insurance Failing? 9
Internationalizing InsurTech – A Global Phenomenon
Digital Transformation in Insurance – Four Common Factors
in Different Markets 88
from Other Industries 13
Increasing Access to Insurance in Developing Countries 91
InsurTech – Problem or Solution for Agents and Brokers? 17
Insurance in China 95
The Best InsurTech May not be InsurTech 21
Seven Things Insurers and InsurTechs Need to Know about
“Real” InsurTech Startups do it Differently! 24
the German Insurance Market 98
InsurTech in Turkey – Challenges and Opportunities 102
2. InsurTech Now and Next
InsurTech in Latin America – The Promise of Insurance
for Everybody? 106
A Cartographer’s Dream – Exploring, and Mapping,
InsurTech Trends – Why Regionalization Matters 108
the New Unknown 32
Where Does InsurTech Leave the People who Work in Insurance? 35
InsurTechs – Magical Thinking and Other Secrets of Success 40 5. Collaborative Innovation: Observe –
“INSoT” – The Insurance of Things and the Proliferation Partner – Invest
of Protection 43
From Insurance Premium to Discrete Event 47 The Corporate Collaboration Opportunity in
Seamless Insurance: The Time is Now 50 InsurTech 117
The Potential of a Pension Dashboard Infrastructure Competition vs. Coopetition in the Insurance Market 121
for UK Pension Savers 53 Incumbent and InsurTech Collaboration via Open
Six Mega-trends that Will Take Insurance Back to the Future 57 Innovation Strategy 124
InsurTech – Not a Zero Sum Game 61 A Collaborative Approach in the InsurTech World – One
Platform in One Click 129
3. The Founder’s Journey Dating InsurTech Startups 134
Altered Attitudes, Altered Outcomes – Collaborating for
Not too Big to Learn not to Fail? 68 a Better Future 137
Insurance Expertise, Family, and Integrity – The Story Think InsurTech Culture Before InsurTech
of SPIXII’s Founding Team 71 Adoption 140
6. The Value Chain 8. You Said Tech
A Four-Step Practical Guide to Build InsurTech Value Chain Becoming Tech-First – Why Adopting a “Tech-First” Mindset
Ecosystems 148 is Non-Negotiable 227
Sell Your Insurance at the Right Time – Consider Micro Policies 153 Practical Robotics in Insurance – The Future is Here Already 231
InsurTech: Refreshingly Different – Like Lemonade! 157 Frictionless Insurance in a Land of Utility 236
Forget Peer-to-Peer, the Future of Insurance is Invisible and The Smart Journey – From Contract Hype to Insurance Reality 240
Parametric 161 InsurTech and AI – You Can Run but You Cannot Hide from vii
Behavioural Design and Price Optimization in InsurTech 165 the Future 244
Data Changes Everything 171 Blockchain Startups – Unlikely Heroes for the Insurance s
t
Beware of GDPR – Take your Cyber Risk Responsibility More Industry? 247 n
e
Seriously 175 Alexa, Can You Get me an Insurance? A Structured Approach nt
Why Claims Sharing? Innovating within the Business- to the Hyped Technology of Voice-Based Assistants 250 Co
to-Business Insurance Claims Handling Ecosystem 179 InsurTech’s Big Questions – Why the Customer is Still
Reinsurers Need Backward Innovation 182 Always Right 254
ClaimsTech – The InsurTech’s Action List 257
Technology is Not Enough 260
7. Business Models
9. InsurTech Futures
Business Model Innovation – From Incremental to Disruptive 190
The Future of Insurance – From Managing Policies to Digital Transformation and Corporate Innovation Management –
Managing Risks 195 an Incumbent’s Action Plan 268
Seeing through the Hype – A Closer Look at Key Smart The New World of the Connected Customer – The Future
InsurTech Business Models 199 of Microinsurance? 271
Assessing the Long-Term Viability of the Insurance Peer- Personal Asset Liability Management System 274
to-Peer Business Model 202 Social Media in Insurance 277
You Said … Sharing Economy? 206 InsurTech and the Promise of “Property Value Hedging
From Claim Settlement to Claim Prevention – How Insurers Technology” 280
Can Make Use of Predictive Analytics to Change their Insurance 2029 – Life Backup Companion 283
Business Model 211
True Business Model Innovation – a Credit-Based Approach 215 List of Contributors 288
From Event-Focused Insights to Coaching 218 Index 303
Preface
The FinTech Book – the first globally crowdsourced book on author, group of authors, or indeed region in the world that
the financial technology revolution – was published by Wiley in could cover all the facets and nuances of InsurTech in an
viii
2016 and has become a global bestseller. It exceeded all our exhaustive manner. What is more, by being able to reach out to
e expectations, and, in the meantime, the book is available in five a truly global contributor base, we not only stayed true to the
c
a languages across 107 countries both in paperback, e-book, spirit of FinTech and InsurTech, making use of technological
f
e
r and as an audiobook. More than 160 authors from 27 countries channels of communication in reaching out to, selecting, and
P
submitted 189 abstracts to be part of the book. About 50% of reviewing our would-be contributors, we also made sure that
all contributors were chosen to write for the final book. When we every corner of the globe had the chance to have its say.
launched The FinTech Book during 2017 across the world, our Particularly those that have very distinct views as to where
authors and readers had many opportunities to meet in person, InsurTech is going and the unique challenges it faces due to
sign the books together at global book launch events, and deepen the inherent building blocks on which insurance grew. Thus,
our FinTech friendships worldwide. we aimed to fulfil one of the most important purposes of The
InsurTech Book, namely to give a voice to those that would
In 2017 we decided to extend our FinTech Book Series by remain unheard and to spread that voice to an international
writing three new books on how new business models and audience. We have immensely enjoyed the journey of editing
technology innovation will change the global asset management The InsurTech Book and sincerely hope that you will enjoy the
and private banking sector (“WealthTech”), the insurance sector journey of reading it, at least as much.
(“InsurTech”), and regulatory compliance (“RegTech”). We
followed our approach of crowdsourcing the best experts for
More than 250 authors from 25 countries submitted 244 abstracts
you to give you the most cutting-edge insight into the changes
to be part of the book. We asked our global FinTech and
unfolding in our industry.
InsurTech communities for their views regarding which abstracts
they would like to have fully expanded for The InsurTech Book.
The InsurTech Book is the first book taking this approach globally –
Out of all these contributors, we selected 75 authors who
a book that provides food for thought to FinTech newbies,
have been asked to write their full article, which has now been
pioneers, and well-seasoned experts alike. Let me introduce you to
included in this book. We conducted a questionnaire among all
our contributors and authors.
our selected authors to gain greater insight into their background
and expertise. More than 70% of our authors have postgraduate
The reason we decided to reach out to the global FinTech and
university degrees (see Table 1) and strong domain expertise
InsurTech communities in sourcing the book’s contributors lies
across many fields (see Table 2), and 77% of our authors had
in the inherently fragmented nature of the field of Financial
their articles published before.
Technology applied to insurance globally. There was no single
