Insurtech, the buzzword of the insurance industry, has been impossible to avoid, appearing in email inboxes and at conferences virtually non-stop.
Wesley Todd, a former insurance defense counsel and creator of CaseGlide, a collaboration, workflow and analytics platform, explains how carriers can weed out insurtech noisemakers from legitimate firms in the first episode of Insights on Insurtech.
“What happened in the claims litigation department is that all the sudden, technology equated to one thing, making everything cheaper,” said Todd. “Well, as we all know by now, after plenty of iterations of technology and insurance, that’s not something that anybody likes or that’s necessarily going to even work.”
As an example, he said that legal bill review technology only offers one score, so legal firms will focus on achieving that, at the cost of everything else.
“They’re going to try to win on expense no matter what’s actually going on in the department,” said Todd.
A way to circumvent this type of situation is to vet tech firms more thoroughly. Firms unfamiliar with insurance will try to sell a generic tool, one that can solve a broad issue.
“Technology, especially from a noisemaker and not a true, legitimate firm, can wind up controlling even the best experts at an insurance company, rather than empowering them,” said Todd.
The person selling the insurance technology should understand how an insurer runs its business, he added.
“If you’re an insurance company and you’re talking to an insurtech…if you wouldn’t hire them to run that department, then you surely shouldn’t hire them to put in the software that runs that department,” Todd said.
Some examples of insurtech developed by industry insiders include a platform that connects the insurers with field adjusters, a company that aggregates residential property data, and another that is considered the Google of insurance policies.
Todd said insurtech firms need to change their marketing tactics when it comes the insurance industry.
“Insurers are getting a lot smarter about partnering with people like them. People that have done the work. When you follow the latest marketing trend and do some white paper … you do some superficial blog post or advertisement…you’re just telling everybody at the insurance industry, including myself, including you, that you’re not one of us,” said Todd. “And that you’re never going to be able to help us.”
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