The InsurTech Formula for Success

This article originally published on Daily Fintech and is republished here with the author’s permission.

I met up with a friend recently and as we were catching up, she said to me, ‘I see all this posting that you are doing on LinkedIn on Insurance and Technology…what is it you actually do?’

This is a question I commonly get from my friends and family who are not in the Insurance industry.

In the past, I have tried answering this in a few ways:

  • “I help startup technology companies find ways to partner with Insurance companies in an effort to make those companies more ‘digital’”
  • “Have you heard of the term ‘fintech’? Insurtech is like what fintech is to banking, but for Insurance
  • “Have you heard of blockchain, artificial intelligence, the internet of things, etc? The Insurance industry is currently figuring out how to adopt these technologies to make Insurance better”

Usually, all these replies are met with a ‘deer in headlights’ look, or something like ‘oh, so you’re still working in Insurance then, right?’.

To the friend that I met, I took a slightly different approach.

I simply said, ‘I am in helping Insurance companies provide a better experience and more value to their customers through use of technology.’

I then gave her an example.

I asked her if she had ever been in a car accident and we discussed the process of calling the insurance company, filling out reams of paperwork and waiting for the reimbursement.

I explained to her that by streamlining the claims process through the use of online websites or an app, individuals can easily file their claims. There’s even the possibility of conducting video calls with claims assessors to get the whole process rolling along.

My job, in that scenario would be to lead these Insurance companies to the technology provider (or vice versa).

That, she understood.

I further explained to her that the Insurance industry is going through a fundamental shift, whereby the industry participants are looking at ways of becoming more digital in an effort to become a bigger, more trusted part of their customers lives.

It was this conversation that gave me the inspiration for this article. In some ways, it’s a follow-up to an article I wrote at the beginning of March.


Insurtech Success = (customer experience + dollars and cents + compliance + applicable technology)^team

There is no one definition of Insurtech. Many influencers and thought leaders have provided their different views on what this word means.

Insurtech is not so much a ‘thing’ but rather a ‘movement’.  As I explained to my friend, it’s a movement that has caused the Insurance industry to fundamentally look at the way they are doing things. The reason they are looking at the way they are doing things is:

  1. Everyone else is doing it, so if industry participants don’t, they may feel ‘left out’.
  2. Many are concerned with new digital disruptors coming in and know that they need to enhance their propositions or risk of being put out of business.
  3. The industry incumbents realize that their customers expect more from them. Customer expectations these days are higher due to the engagement from other industries, i.e. Amazon, Uber, Airbnb, Google, Apple, etc, and consumers expect all industries to cater to them and ‘get with the program’.

The lack of one ‘true’ definition of Insurtech and the fact that industry participants are assessing ways to do business differently open up a number of opportunities within this ‘Insurtech movement’.

As such, I would like to provide a formula for all of us that are participating in this ‘movement’ to consider when going about their Insurtech/innovation/transformation/disruption initiatives:


Insurtech Success = customer experience + dollars and cents + compliance + applicable technology^team


  • Customer experience = what part of the customer experience are you trying to make better? Is it quoting/purchasing? Is it claims? Is it servicing?


  • ‘Customer’ may not always mean policyholder. Customer may also mean the employees and/or partners (like auto body shop) that are part of the value chain process. Think about which ‘customer’ you are trying to solve a pain point for.


  • Dollars and cents = does the solution help to increase sales and/or reduce costs? Our industry is a business and that means we get measured by the dollars and cents. Ultimately, a solution that is being put in place should do one of these things – increase sales and/or reduce costs.


  • Compliance = is the solution in line with regulations? Is it compliant with existing internal guidelines? Is it fair to customers? Is it secure?


  • Applicable technology = what is the right technology that should be used to meet this need? This should be the easiest part of the equation once the other 3 are determined.


  • ^team = to the power of team. An Insurtech initiative will only succeed with a solid, well-rounded team backing it.


The what and the why should be addressed for each of these variables.

This formula works for both B2B, B2B2C and D2C solutions. Whether you are a full-stack/MGA provider with a new product, a technology company helping re/insurers with some area of the value chain or an industry incumbent wanting to undergo some sort of innovation initiative, this formula should be driving your decision process.


What do Insurance customers really want?

This analysis by Bain, which is a survey of over 172,000 insurance customers in 20 countries starts getting to the crux of this. In the executive summary, the report states a few items that customers are looking for:


  • ‘Customers often cite price as their main reason for buying an insurance policy—particularly in property and casualty (P&C).


  • Companies need to master the basics of customer relations. They must be accessible, accurate, fair, fast, empathetic and reliable—for every customer in every encounter.


  • Insurers are discovering that the best way to get more quality time with their customers is to offer them non-insurance services—such as home security, car maintenance, health monitoring, financial planning and much more—that are natural extensions of their core products.’


Looking at this, existing incumbents and challenger startups have a number of things to get right.

For one, customers are going to continue to shop for insurance based on price. This is, unless, they can see differentiated value from the companies they can purchase from. This is where the next two points come in. Companies must be able to have seamless and personalized interactions with their customers. Further, they must offer some non-insurance related benefits and services which help their customers to live happier and better lives (i.e. offer ecosystems).

In an industry as highly regulated as ours (both from a consumer protection and solvency perspective), getting all of these right is not easy.

That’s why every company that is trying to participate in the ‘Insurtech movement’ must have a clear and concise plan. My proposed formula to assess that plan is:

Insurtech Success = (customer experience + dollars and cents + compliance + applicable technology)^team



I have been on a ‘customer focus’ Insurtech soapbox for a while now.

And I will continue to do so.

The way that we are seeing the industry transform and enhance as a result of the Insurtech movement is simply fascinating.

However, we can not get caught up in the ‘pretty shiny objects’ that distract us from the core of what we do.

As a business, we must serve our customers and make money. As an industry, we must do this in a way that is in line with regulation. We can do these three things (customer experience, dollars and cents, compliance) better, with some good technology enablers.

I challenge everyone reading this to think about their own plans in the context of the variables I mentioned. In challenging you all, I am also challenging myself to do the same. Let’s do this together.


About Stephen Goldstein

Stephen Goldstein is a multi-disciplined, global insurance executive with experience working on three continents and eight countries. He has held roles in direct sales, sales management, market entry, risk management, advising and investing in startups and reinsurance. Stephen currently serves as an Advisor for two insurtechs, ProNavigator and Finaeo, and consults with insurance carriers and insurtechs on growing revenue, launching go to market initiatives and accelerating innovation adoption.

1 thought on “The InsurTech Formula for Success”

  1. “I asked her if she had ever been in a car accident and we discussed the process of calling the insurance company, filling out reams of paperwork and waiting for the reimbursement. I explained to her that by streamlining the claims process through the use of online websites or an app, individuals can easily file their claims.”

    The industry does not have a history of “filling out reams of paperwork” following insurance claims. The use of apps and other technology is a solution for a problem that does not exist. It’s an illusion created by those selling technology.

    Recently, I had my first auto accident in decades. My insurer has a phone app for taking photos and submitting them. In less than 24 hours, I had a repair estimate of $1,961.27 (or some similar amount) and was advised that repairs would take 4-5 days. This is where technology is supposed to shine and demonstrate its vast superiority over traditional methods.

    The reality? Well, $5,000+ and 32 days later, I got my car back. How many updates did I get from my insurance company and the repair shop they recommended? ZERO. The only contact initiated during that month-long period was from me. I did get a check quickly for $1,961.27 (less my deductible) and that was all I was liable for, so I suppose I did have the use of that money for 30 days as a benefit of the process.

    But other than that, all that this technology accomplished was removing the human element from what is often an emotional process. The primary beneficiary was possibly the insurer, but certainly not me. Thanks, but I’d rather spend time communicating with real people, even if that process did involve reams of paperwork…at least I’d feel like something productive was taking place.


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