Connected Insurance and the opportunities for startups
It depends on the business line, the market and the business model.
Let’s talk about the business model:
- A startup with a B2C approach is selling connected insurance products to the final users. This player needs a proprietary underwriting algorithm only if it underwrites the business, so only if the startup wants to be an Insurer or an MGA. In all the other cases, this startup is only a distributor of a product underwritten by someone else and doesn’t need an underwriting algorithm, it just needs to be a great selling machine;
- A startup with a B2B approach is providing some connected insurance service to an insurer. This player is the enabler of all the connected insurance approach of someone else in order to exploit the value of data in each step of the insurance value chain. From my point of view, a proprietary underwriting algorithm could be an interesting service to sell but it is only a small part of the job of this B2B business model and it is more a nice to have than the core of its value proposition. There is also a pain point for a service provider in developing a proprietary underwriting algorithm, it will be based on partial information because the cost of claims is an insurer’s proprietary information
Tara Dilzer Alexander
Director, Marketing Communications and Creative Services