Practical Matters of Insurance Tech Start-up
There are many informative articles that discuss the patterns in the insurance industry for those just starting out to focus on to maximize the opportunities available. However, there are practical matters to be considered relating to operations of a new company.
Meeting with Underwriters
Insurance carriers are no longer looking for new agents to sell their products, especially ones that are not already established. Before you arrange appointments with carriers, consider the following:
- Some carriers are adverse to risk, which makes it ineffective to request an appointment. Seek carriers with a reputation for taking on risks.
- Too much competition from their existing distribution channels could prevent the carrier from working with your venture.
- Which person at the carrier would be the best person to approach because they believe in your mission?
Digitized Customer Acquisition Issues
Providing your products digitally puts you in the spotlight, so even the slightest infraction of law is noticeable. Illegal commissions to real estate agents from placement of homeowners or title insurance can put you out of business quickly, so partnering with Zillow or other online real estate sites is not the most reliable business plan.
People Like People
While the digital age is taking the world by storm, people still like talking to other people. An established agent network can provide more cross-selling of other products than any amount of web apps. Real people can think of follow-up questions that the app cannot. Think it through before deciding to forgo agents completely in lieu of apps.
Risky ventures sometimes pay more for insurance than is necessary. This gluts the insurer with more poor risks than is representative of the norm. It also leaves your acquisition strategy open to more instances of fraud related to other carriers.
Insurance is beneficial to everyone, but not everyone needs insurance. Fear-mongering will degrade a customer relationship and create long-term damage to your business. It is not appropriate to over-sell for instances when someone can afford to self-insure. Instead, keep to the products they need.
Insurance policies are intangible products consisting of a legal contract and underwriting methodology. This makes them easy for competitors to copy, which happens frequently. To maintain any edge, protecting your products with competitive barriers is an essential part of the business plan.
Regulation in the industry is not to be ignored. If you do not respect regulators, you and all your companies could be banned from conducting business by a state, province or district. Even experienced companies can be removed from an area for illegal practices. The insurance industry takes regulation seriously.
The insurance industry is rife with specialty firms who can provide simple lines of insurance so your founders don't have to. Some start-up business models cannot support multiple lines of insurance, so outsourcing for accouting, actuarial analysis, claims, compliance, investment management and regulatory filings is a smart option.
Once you have established a solid business plan and discussed options with underwriters, then you can follow those opportunity patterns mentioned in the multitude of articles throughout the insurance industry.
- Life Insurance 2.0 & the Death of the Health Exam
- Insurance Accelerators: Fueling Innovation
- Peer-to-Peer Insurance: Mutual by Another Name or Transformative Innovation?
- Insurance Industry Innovators: An Asian Perspective
- Insurance Applications of Blockchain
- Insurance Industry Should Get Ready to Embrace Loyalty Marketing
- Ideas 42 Applies Behavioral Economics to Insurance
- Global Insurtech Trends to Watch for in 2017
- Implementing Analytics for Tangible Results, as Explained by Dax Craig of Valen Analytics
- Machine Learning and Artificial Intelligence: Applications for Insurance
- Maddock Douglas, Why We Are At InsureTech
- Everything You Need to Know about MarTech for Insurance Companies
- The Launch of Carpe Data
- Issues in the Insurance Industry according to Caribou Honig, Chairman & Cofounder of InsureTech Connect
- Consumer Auto: Evolution or Revolution?
- A.I. for Agriculture and the Insurance Implications as Explained by Adam Smith of Descartes Labs
- The Rise of InsurTech Investment
- Jornaya - The Power of Intent
- The Gig is Up in the Insurance Industry I Insurance Revenue
- Business Insurance Innovators
- Google Shuts Down Its Insurance Comparison Product
- How Much Money Insurance Agents Make
- How Will Self Driving Cars Effect Auto Insurance
- Insurance Industry Disrupters
- Insurance Technology Industry Conference
- Insurance Tech Startups Landscape
- Investments Into Insurance Tech Startups Are Growing
- More Insurers Are Partnering With IoT Companies To Offer Fantastic Consumer Discounts
- Peer to Peer Insurance Innovation
- Practical Matters of Insurance Tech Start up
- What will Insurance Tech Change
- Why Google Shuts Down Its Insurance Comparison Website
- Why Multi Product Insurance Shopping Portal is a Good Idea