What Yung'uns don't understand about insurance

"Yung'uns ice-grilling me, oh - you're not feeling me?
Fine; it cost you nothing - pay me no mind
Look, I'm on my grind cousin, ain't got time for fronting"          
-Heart Of The City (Ain't No Love), Jay-Z

If I was an experienced insurance professional (20+ years), I think I'd feel a lot like Jay-Z.  Insurance is an important instrument in our society.  It works pretty well.  And yet, the insurance industry is being deluged by publications and writers (including me) decrying the industry's lack of technology innovation.  

The truth is the insurance industry is sparking technology innovation.  The innovations may not be the "Uber" of insurance, but why would successful insurance companies want to disrupt themselves?  (Hint:  They shouldn't)

I wanted to use this post to highlight how insurance is fostering innovation along with some suggestions to get to the next level.  

Create an incubator  

I love well-run incubators.  In Kansas City (my home), I've been able to see the Sprint Tech Accelerator grow and prosper. Similar initiatives are popping up in insurance. 

The Global Insurance Accelerator.  Based in Des Moines, Iowa, this accelerator provides seed funding and mentoring over a 90 day period.  Full disclosure, I am a mentor for this year's class.  I'll be in Des Moines January 28 and 29 if anyone wants to meet up (email me at [email protected]).  

Startupbootcamp Insurance Accelerator.  Based in Europe, this accelerator also focuses on insurance.  I have heard good things -- anyone out there participated? 

I'd love to see an insurance company start its own accelerator, similar to Sprint's effort.  Has this happened?  

Create a VC fund (and a thesis) 

I would do this topic a disservice if I tried to summarize it.  Instead, I would recommend that you check out CB Insights on Insurance.  Did you know insurance tech startup funding hit $2.65 BILLION last year?  

The venture capital firm that I keep an eye on is AXA.  The company launched AXA Strategic Investors last year with over $200 million in capital to be deployed.  

There is one thing missing when I review articles on insurance company VC's:  what's your thesis?  It would be great to see specific insurance VCs focus on niches:  wearables, IoT, software, etc.  

Spin out new ideas

I was also reminded that innovative insurance ideas can come from within.  For example, Lockton insurance agency recently announced it was expanding it's Mylo offering with the hiring of a key employee.  Lockton has a history of spinning out new products and offerings, like it's successful Lockton Affinity Group.  Strategic spin offs are a key part of launching and scaling innovative solutions.   

Insurance is innovating every day 

And that brings me to one final point.  The insurance industry is certainly innovative.  Insurance companies are constantly rolling out new products to cover developing risks.  Sometimes these new products are successful, and sometimes big losses are incurred.  That's the name of the game.  

So what do you think?