The Importance of Balance

On January 2nd, Insurance Thought Leadership published an article called, “Insurtech Trends for 2022”. We think it reflects the abiding confusion and uncertainty around insurtech. This excerpt seems to reflect that confusion and uncertainty:

While insurtech has been around for some time, the past year’s growth has been picking up substantially. We’re well past the days of simplistic disruptive thinking, where startups would present themselves as the Uber of X. Traditional insurers clearly understand the importance of becoming digital … The opportunity to transform traditional, legacy-driven processes remains massive, as is reflected in global investment transactions in insurtech – by the end of the third quarter of 2021, up another 23% from the year before and hitting $10 billion … Compared with overall fintech data, insurance actually still remains an underinvested sector.

If insurance represents an underinvested sector, where did the $10 billion go? If we’re well past the days of simplistic disruptive thinking — and if insurtechs have learned the underlying complexities of the insurance business model they aim to renew — why is insurance an underinvested sector? We may have an answer.

Value-Based Buying

In buying software or systems, insurers have to consider a number of factors:

• What are their needs, short-term and long?
• Who’s the vendor they’re buying from?
• What’s the track record of the vendor they’re buying from?
• Are they trading fresh ideas for a lack of experience?
• Are they trading experience for a lack of fresh ideas?
• Is it possible to get both?
• How long will implementation take, including business rules, integrations, and customizations?
• How good will the software of the system be once it’s up and running?
• Does the long-term value exceed the short-term price?

Private insurance companies and mutuals are responsible for the financial interests of their policyholders. Publicly traded insurance companies are responsible for the financial interests of their investors. Neither of those responsibilities leaves room for undue risk-taking and dice-rolling.

That’s why we look for long-term, mutually beneficial relationships. That’s why we offer a fixed-price engagement so there are no short-term prices or long-term surprises. And that’s why we focus on total cost of ownership over the long-term.

The Best of Both

We understand most people would prefer the newest, the fastest, the shiniest. Maybe the insurance sector is underinvested (we’d like to see that term clearly defined) because insurance isn’t new, fast, or shiny. Maybe the promise of new, ideas doesn’t offset the security and stability of experience. Or maybe it’s possible to strike a balance.

We believe it is. That’s why we’re here.