Episode 8: Say, you want a revolution?

I achieved a little fame this week: I was the guest on the famous InsTech podcast (if you missed it, the link is here). It got me thinking about the insurTech phenomenon, the billions of investors’ money that have been poured into it, and about the role of technology not just in insurance, but in society.

InsurTech comes in various shapes and sizes. At the extreme end are the companies which set out to incite a revolution which would unseat the big personal lines players (disruptors, they were called), and replace them with a slick breed of new-era insurers that was magically more equitable because of technology.

Alas, their revolution was cancelled. Most insurTechs with such ambitions have disappeared, or dialled down their ambitions after they burned through millions to discover that insurance is really difficult. They learned the hard way that the incumbents’ experience cannot be replaced with a few lines of code. Disruption takes more than a clever portal and a large marketing budget that trumpets how a newfangled insurTech with a daft name is somehow going to make, say, motor insurance warm, fuzzy, and fair.

At the other end of the spectrum are companies which are much closer to getting it right. They’re the ones who understand the insuring process, and have used technology to tackle and overcome a single obstacle to the perfectly efficient operation of the market. I’m thinking, for example, of insurTechs that focus on data ingestion, or submission triage, or filling a very narrow but potentially extremely significant coverage gap.

Many of these companies have been successful because they help the market towards its enduring yet seemingly unrealisable goal of sustained profitability. Unlike the revolutionaries, their founders’ exit strategies are typically focused on building their business towards a sale, rather than on untrammelled growth, international expansion, and a stock market listing culminating in global revolution, followed by early retirement in a chalet next to a marina.

I don’t think of Quotech as an insurTech. Never have. We don’t want to fix all the challenges facing the specialty insurance sector, but nor do we focus on a single niche problem. We are an insurance technology company, one that adopts and modifies existing technologies to eliminate pain points for underwriters and brokers by providing truly useful tools that make their jobs easier. With each success, we create a mini revolution for an underwriting or broking team. For me, that’s enough.