How do I break into insuretech?
I’ve been getting lots of queries over the last year on “how to break into insuretechâ€. Whilst individual circumstances often differ, I find many themes crop up time and again and so here’s my take on the issue. This is going to be part of a mini series (likely 2-3) posts where I dissect breaking into the insuretech market for those already in the insurance industry. The comments are applicable to any form of insurance start up (whether tech-focused, or more traditional, eg MGA or new Lloyd’s syndicate; indeed many insuretechs are MGAs so the lines are getting blurrier).
I generally tend to write articles that are grounded in facts/research (as time consuming as it is, I enjoy doing it) but this will be different. It's styled as a series of questions to ask yourself, challenge your thinking and perhaps even get you to consider the issue from a number of perspectives. The industry is incredibly diverse which is great from a choice perspective but too much choice is sometimes unhelpful. And of course, it's a fast moving industry that won't be right for everyone.
Step 1: Thinking about it
Do you really want to break into insuretech or are you really looking for another challenge? If you’re simply looking for another challenge, how much do you want to disrupt the status quo vs simply develop your skills and expertise? Have you explored your internal options (development program, overseas posting, departmental rotation etc)? Could you even look at joining your company’s insuretech / VC fund?
Can you afford to work for an insuretech? If you’re and underwriter or actuary with 6-8 years+ experience and you’ve had reasonable progress in your career so far it’s likely that you will already be earning at the top end of what most insuretechs can pay. To some extent how well an insuretech can pay is dependent on how much money they’ve raised. If it’s less than 10m USD it’s likely they’ll want to get people in with the carrot of a low base and more equity. That equity may be worth a lot or may be worth nothing, and it may take a few years for that to become apparent. Could you work for a lower salary in the meantime? Most people would like to think that they would but in 13 years I’ve only ever moved 4 people for sideways comp or a cut. I have worked with firms that were far better funded and more funding often means deeper pockets.
Can you take the execution risk? What if the role doesn’t work out or the firm shuts down? If you have a mortgage and dependants, then the stakes are much higher if something goes wrong. Conversely, if you’re early on in your career, renting and mobile, you may have a lot more freedom and energy to compensate for less experience.
Do you have the energy and time to make it work? Any start up endeavour is going to require lots of work. Do you have the energy and stamina? Are the circumstances right in your life for you to take this on? Are you risking taking on too much (part time professional exams? Community/charity work? Children? Elderly relatives?)
And finally... remember that most things can be learned. Having less experience but more energy can be an advantage. The most successful firms blend youth and experience. Beware of firms that have 5 enthusiastic 25 year olds with zero insurance experience - big red flag for execution risk. I know this is likely to be the most controversial comment but there’s a reason firms like Munich Re are still around - insurance is their DNA.
Take-away: Think long and hard about their personal circumstances and commitments. Talk to your partner/spouse first. Look at your finances.
Look out for step 2 next week - some actionable ideas on how to do it once you've decided it's right for you. Edit: step 2 is now here
Thoughts? Comments? Anything to add?
Leadership and Keynote Speaker and member of the Data Science Research Centre at University of Derby
7 å¹´Generally good questions for whatever career path you want to move to. Just change the name of the industry and they apply just as well.
Multi-disciplinary innovation
7 å¹´As an underwriter, are you prepared to help the insurtech build algorithmic underwriting systems that will disrupt the traditional ways of working of underwriters, thereby enabling them to find new ways to create value? As an actuary, are you prepared to help the insurtech build algorithmic actuarial systems that will disrupt the traditional ways of working of the actuary through digital scenario systems that evaluate risks for which there is no precedent? As a loss adjuster ... (same pattern)? As a broker, are you prepared to help the insurtech build algorithmic pre-risk systems that intelligently and cost-efficiently describe what the customer wishes to have insured? As a relevance creator, are you prepared to help the insurtech create algorithmic systems that transcend the silos of traditional insurance systems to enable better engagement with customers, more frequently?
Senior Vice President - Marine & Corporate Risks at Risk Management Services (Pvt) Limited
7 å¹´Though insurance is 99% common sense, but, in my opinion, experience do count. No matter how energetic, one could be, but, if you are not aware of the products, it's aesthetics, market dynamics, etc., it would be very difficult for a start up to succeed. Nowadays, no matter how many no of years an underwriter carry, it is necessary that he should remain privy to technological developments.
Insurtech Innovator Driving AI and Digital Transformation in Insurance
7 年Great checklist to find out if you are eligible to work in Insurtech. I sustain that Insurtech has to be run by insiders that haven′t surrender to the status quo (outsiders bring new ideas, but you have to have a deep knwoledge of the insurance sector to disrupt it). I have passed with flying colours all your questions. Happy to be at drive&win