Europe is an extremely active InsurTech market, with London appearing to be the emerging epicentre. Throughout the conference it was hard to escape the energetic presence of funding and accelerator-type programs, and of course incumbents scouting for new propositions or start-ups looking for exposure. Discussions generally pointed to one of two preferred outcomes: building alternative insurance value chains, products and services; or accessing new technologies that create efficiencies across processes.
At Europe’s largest InsurTech event, there was an impressive list of speakers and coverage across a diverse range of subjects including AI, IoT, Big Data and RPA, Blockchain, Regulation, Marketing, Distribution, and the impact of technology on the insurance value chain.
Broadly put, there are three key representative groups that equally are contributing to the InsurTech whole, and all were well represented at the conference: incumbents; start-ups; and investment communities. Off to the side, but certainly still important, are consultants and various incubator or accelerator-type programs, as well as regulatory bodies and government agencies.
Each of the three core groups (and participants within them) have varying views and approaches, and in my opinion it is a matter of being open-minded and exploring the potential collaboration opportunities before deciding if a natural fit exists or not. This isn’t easy, given IP and other demands and constraints, but the greater traction seemed to be in line with willingness to be transparent and open.
Ecosystem and partnership platforms to create seamless, efficient, customer-centric solutions was where most discussions led, across incumbents, investors, and start-ups.
Partnership & Collaboration
Partnership and collaboration was a core theme. It felt like every other panel discussion, a large number of presentations, and subsequent conversations were about being more transparent, creating ways to build platforms and ecosystems in which new market spaces could be created, explored or exploited via commercial partnership, as opposed to traditional business doctrine of creating and owning the biggest slice of the pie.
This was without a doubt another constant theme. Get in, do things, learn from mistakes. The buzz words of fail fast, Agile, disrupt, etc. were used in abundance, and there were varying views of how to adapt or adopt. There is no one answer, it’s a matter of being committed to act in open-minded exploration to discover where opportunity lies.
Political & Regulatory Scene
The political and regulatory environment was high on the agenda and it looks like the two regulators (PRA & FCA) are slowly catching up – even in some ways creating the right support that extends beyond jurisdiction i.e. cross-border solutions to solve digital globalisation. This says to me the FinTech/InsurTech space is being taken seriously.
I got a firm sense that NZ will become increasingly important to the UK as a trading partner post-Brexit, given the growing uncertainties (and known impacts) of the UK’s looming March exit from EU. Both NZTE and their UK equivalent, the Department for International Trade, are very open and willing to set up events and provide contacts and guidance to NZ businesses. In particular Dhaval Gore (NZTE) is keen to hear more of what we want to do and how he can assist. But there are whole host of other contacts including City of London representatives that will be of help. I’m confident FinTechNZ can assist, so kudos to James Brown, Andrew Dentice, and so many others that helped with introductions.
Incumbents & Where Innovation Lies
Predictably, as has been my learnings to date, no-one has irrefutably proven that one works better than the other in terms of innovation being within corporate, or at arm’s length. What is known, and was discussed, is corporates (and I’d describe us as being a corporate in this respect) having challenges in how to create and develop new propositions, and make them work within what is relatively highly structured environments and disciplined cultures. It was pleasing to see the number of incumbents in the UK/Europe being open to partnerships, or specifically investing in technology-driven solutions.
Incumbent representatives seemed to be predominantly either those leading technology teams, or working within innovation strategy, venture funding, and new products. All seemed to be willing to partner or invest with others, however there was healthy debate as to what forms of engagement might be created i.e. exclusivity vs. inclusivity. One speaker, from EOS, an independent and specialist InsurTech investor I thought had a good model in which they bring various incumbents’ venture funds (such as Aviva and Munich Re) into a ‘superfund’, so as to both create a traditional VC return and commercial alliances that become shared technology.
Start-Ups/Developed Tech Companies
What was pleasing to see was the level of interaction between incumbents and InsurTechs, and how they are looking for ways in which to work together. It goes without saying that the start-ups are looking for sales channels and broader opportunities as well as funding, and the seven minute demos (I’d call them pitches) from InsurTechs were well received.
One takeaway I will note, in talking to InsurTechs about what their key challenges are, was how well or not they might be taken seriously by incumbents. It’s not easy for incumbents to either fully understand the value proposition or whether they can fully trust delivery of it, let alone how they implement, but the more positive InsurTechs I spoke to seemed to have gained traction by having the right investors on board. Quite possibly a lesson for NZ InsurTechs – secure strategic partners that already have a reputation, to aid in better traction with insurance incumbents.
The size of the market is huge, as you are no doubt aware. Even the smaller players like Hiscox have 1.9m policy holders in the UK, and they are keen to understand what we are doing in NZ.
I concur with Andrew Dentice’s comment on his recent UK FinTech trip that we understand UK markets better than we might US, and vice versa UK to NZ (possibly Europe too). This might sound controversial, but the way in which we do business, our cultural and principal alignments, along with potentially further favourable trading opportunities , all add up to a better fit.
The regulatory environment is simpler too. I think Tr?v’s founder and CEO Scott Walchek put it best, “The regulatory environment is important if you want to get to market fast. Australia and the UK have a single regulatory authority versus the 56 bodies in the US” He got it slightly wrong – the UK has both the PRA and FCA, but you get the point.
The ability to scale technology solutions, way beyond traditional borders has created exponential growth and value opportunity, and the UK/Europe seems a viable option to leverage. This means, with the right partners (funding or channel) the potential for NZ companies to realise greater ratios of return on investment if adopting a tech immersion type strategy is real. UK and European incumbents, investors, and start-ups looking to connect are broader than home markets, and this may well create opportunity for NZ organisations.
The bottom line is, if you are tech business looking to scale, you will need to consider your own approach to UK/Europe and what that might mean in terms of investment of time, resource, and money. For Crawford NZ Group Holding’s venture arm we are committed to what looks like an exciting adventure into unchartered waters that we believe will ultimately prove fruitful.