Because of the potential profits that even the winning of a small regional market-share provides, many investment funds (Venture Capital and Private Equity) have focused on Insurance as an industry that can provide an incredible return. Thus, most startups are truly focused around the edge, creating Startup Brokers, MGA’s, TPA’s, SaaS management tools, billing tools, claims platforms, etc. The thesis makes sense. However, in the area of actual risk burden, actual bearing of a risk, whether in Term Life Insurance, Renters Insurance, Car Insurance, Homeowners Insurance, SME Commercial, Workers Comp, D&O, etc. there are so few ventures that actually live or die on their ideas of disruptive change, that it’s not even worth discussing.
However, for all the lines mentioned above, most of the companies that come to mind MUST and DO partner with Insurance Carriers. The same carriers that they condemn as dinosaurs and walking dead.
Actually, there’s a lot to be said about walking before you run.
For some reason, almost 3 decades after I started my Insurance Industry Journey at The Travelers Insurance Group School in Hartford, CT and as an Field Representative, I’m now finding myself in the midst of using everything I was exposed to while still an infant in terms of knowledge and experience.
About this time last year, I was asked to lead a company’s effort to garner adoption by the insurance distribution channel. Despite my experience and track record, on the very first day, I saw doubt and disbelief in the eyes of the individual that I was hired to advise and guide towards success. I’ve usually been that person making the final strategic decisions. So, I had empathy. But, after a few more episodes, I decided to make it known that I was again available to work with other prospective companies.
For some reason, I got an email from a company that connects prospective job seekers with companies looking for people with specific skills. I responded and within a day actually 2 hours, I had traded emails with the founder of an Insurtech and was asked to sign an hourly consulting agreement.
I had heard the advice of friends, when I had experienced tough times, “when one door closes, another door opens”, “everything happens for a reason” and the more Biblical (especially if I was despondent) “it’s all G-d’s plan”. But, never had I closed one door so gratefully and had another open without warning or preparation or even a resume!
The company was based in Northern Europe, with an office in the Silicon Valley. Safetywing’s founders are incredibly bright, articulate and more focused on a plan (and not hoping that it all worked out) than anyone, and I mean anyone I had ever met. Safetywing had just partnered with Tokio Marine and launched their first Travel Insurance program. In just a few months, they had garnered over 2,000 Digital Nomads as clients. Half in the USA and the remainder throughout the world. Now, almost 8 months later, the number of customers that have joined the Safetywing community has exponentially grown!
My task was simple and would use the very skills that I enjoy using the most and have had the most success relying upon. Creating new products (some that have never ever been created before) with insurance carriers that have never (at least I assume they’ve never ) been asked to create with a partner that was new and had yet to expose themselves to the normal Venture Capital or Insurance Carrier resources. All they had was this amazing beginners luck, a really smart and enthusiastic team of entrepreneurs, a plan they believe in and me.
So, no white papers, no pitch deck, no one-pagers, no extensive blog, etc.
With these resources (which, by the way, I totally believed we’d be fine), I started researching potential insurance carriers that might be interested in ,or had shown previous interest in similar programs, partnering (essentially underwriting and committing significant company resources, not to mention time) with Safetywing.
My rolodex and contact list is pretty extensive, I’d like to think. But, with Insurers getting a dozen calls a day from similar Insurtechs asking for their time, or insisting that their Venture Capital Arm investigate the potential of the partner/product/service or depending upon their own Accellerator or Incubators to generate the innovation and ideas that they’d back, identifying which window to walk up to within the typically sprawling Insurance Carrier Organization is not as easy as you’d think.
The optimism I have is only encouraged by the LinkedIN News Feed and advertising feed that I am regularly barraged with each morning and at the end of my day. Every insurer wants their policyholders, shareholders, employees and stakeholders to believe that they’re open to, excited by and ready to implement innovation to keep the disrupters at bay.
They attend conferences, even fund lavish cocktail parties at the requisite tradeshows. Their leadership speak regularly on innovation and the future of the industry. And, even their advertisements promote new technology and policy innovations that are similar to the ideas that leading Insurtechs espouse.
Finding the right window or person to champion your Insurtech is an art. They need to not only like the idea, but have enough ammunition to write that first email introducing you to their team which has seen it all or is already burdened with so many pilot programs that one more might cause them to lose your number forever. That first email is much better if you can be introduced to other members of the committee prior to it going out because there’s no one like you or one of your founders to explain and cajole someone who’s never ever heard of you or met you to give you the 5 minutes you need to convince them that “they’re onto something that will really help the company and its policyholders or distribution channel get new clients and keep the ones they have”.
That’s really what being a good partner is all about: understanding that your potential champion is swamped. They’re going in and out of more meetings in one day than most people do in a month. What they need is Data, Proof of Concept, Real Assurance of Success and a willing partner who will commit as much effort to the project as required. Because for an Insurance Company to commit, they know from experience that it’s a monumental and extreme diversion of day to day resources, not to mention actual profit and loss.
I hate to say this, but the bottom line is all about underwriting profits. If you’re product idea or service is not priced correctly, does not achieve scale, does not earn at least 85% retention (and that’s pushing it), you’re not going to be a partner for very long.
During the time I’ve been associated (and really blessed) with Safetywing, I have had meetings with not many of the Insurance Companies or Coverholders that you might know. That’s right. Probably less than 20 in total. Most would think that you have to throw as much as you can against the wall and see what sticks. That’s actually really counter-productive. Insurance Executives are actually a pretty chatty bunch. They keep in touch. They’ve worked at – especially during the last decade – more than one carrier. With M&A activity off the charts and proven Insurance Leaders at a real premium for many new divisions and Markets that Carriers have introduced, smart executives have always maintained relationships with past employers and talk to one another about what’s working and what’s not when it comes to the many new technologies and risk exposures that our ever improving society demands and incubates.
Each introductory meeting requires weeks to set up and confirm, then re-set up when the inevitable crises necessitates rescheduling. Then, if all goes well and the committee or Executive tasked with vetting ideas gives its approval, the next stage is with a high level leader who can’t personally green light anything, but, because it’s a new endeavor, will get it to that crucial decision making group that will or will not move you towards a partnership with their company. I know this sounds like a simple 3 step process and that it seems similar with each unique Insurer. But, it has proven to work as I’ve described.
Once you get the approval, though, you’re handed back down to the actual group of people representing multiple departments that have the privilege of meshing your team with their teams. If, at any point during this critical (what you thought was implementation stage) “can you answer the really hard operational, underwriting, risk, payment, billing and claims questions?” If you can’t give the right answer, each and every person in that group, can and will veto you going forward or cause you to loose so much traction or momentum, that the partnership fails to launch.
One of the lessons I think everyone can benefit from is the introduction of a Founder (either one or both or the entire group) to a situation where you’re experiencing a roadblock or cynicism. A founder’s knowledge, enthusiasm and commitment to success can be truly inspiring. And that inspiration is infectious. People like to work with inspirational and positive people. So much of our lives is dealing with negativity and problem-solving. So, when you have the opportunity to meet with someone whose influence makes your day better and gives you the positivity to believe that your effort and risk will be rewarded, it’s a game changer. Plus, founders do enjoy talking to the actual people that do the work, not just to investment professionals, lawyers, board members and dealing with their own problems!
I’m sure that many of you who read this will feel as though much of what I’ve described as basic Business Development 101. If so, maybe it helped refresh your memory. But, what I’m most excited about is if this is something that makes sense for you and it’s something that you can incorporate into how you work with others.
Obviously, the real proof is in the new products that Safetywing WILL be announcing with our NEW partners before 2019 is over. I’d tell you, but then I’d have to …. you know!