InsurTech – A Force Awakens What’s next for InsurTech and how will it affect business transformation in the insurance industry?

Spiros Margaris, Founder & VC, MARGARIS ADVISORY

Spiros Margaris is an internationally renowned venture capitalist and adviser to FinTech and InsurTech companies and financial institutions, and globally ranked as a No. 1 FinTech & No. 2 InsurTech Influencer by Onalytica. Spiros is a member of the advisory board for the 4th Annual OPEX Insurance: Disruptive Transformation Summit - the leading meeting place for senior operational excellence and process improvement professionals. Ahead of the event, taking place in Atlanta from September 18-20, 2017, Andrea Charles, Senior Editor at the PEX Network caught up with Spiros to find out what is next for InsurTech and how it will impact operational excellence and business transformation in the insurance industry.

How would you describe the current state of digital innovation in insurance?

Traditionally insurance has not been the most willing industry to adapt to technology quickly, but the technological landscape is moving very fast and that is where the InsurTech companies pave the way.

It is a very exciting period. Last year we witnessed a great funding that the InsurTech industry enjoyed and this continues to heat up. The progress in digital transformation experienced by FinTech is slowly happening now in the InsurTech space and it is a fantastic time.

Traditionally insurance has not been the most willing industry to adapt to technology quickly, but the technological landscape is moving very fast and that is where the InsurTech companies pave the way.

Do you think the traditional insurance companies will be able to deal with this pace of change?

I always tell people ask me this question look at the billions of dollars pharmaceutical companies spend on research, innovation and technology.

If we take a page from their book, they buy or collaborate with biotech companies, smaller, innovative and more agile businesses. The big players come in and they bring distribution, money and marketing. The same thing will happen in the insurance industry. From my experience it is best is to partner or buy an InsurTech company and with the power of marketing and distribution and money propel it to the next level.

What are the biggest drivers of disruption propelling insurance into the future?

The nice thing about the start-ups is that they are willing to go beyond the natural comfort zone and push the boundaries. Just look at the InsurTech companies like Oscar, Lemonade and Insurify.

I think one word, competition. New models are total disruptors and the insurance business forces companies to adapt quickly to technological changes. The number of players in this crowded market with different perspectives also influences the market.

The nice thing about the start-ups is that they are willing to go beyond the natural comfort zone and push the boundaries. Just look at the InsurTech companies like Oscar, Lemonade, Insurify, or one company I invested in InsureScan.

If you think about how a lot of consumers perception of the experience with their insurance company, it is cumbersome and it is slow. This is why insurance companies need to employ cutting edge technology to save time and money. If you execute this well, it makes customers happy and happy customers is something we all want.

Providing exceptional customer experience is vital for success, how is the customer experience offering evolving with InsurTech?

It is the big tech giants that lead the way in terms of customer experience expectations. This then filters down to the FinTech and InsurTech companies to implement it.

It is the big tech giants that lead the way in terms of customer experience expectations. This then filters down to the FinTech and InsurTech companies to implement it. The big tech giants like Apple or Facebook have huge resources to study and produce a great customer experience for their customers. I think they are the leaders who educate people how things should be implemented.

The one thing the incumbent has to realize is that if the consumer feels that the customer experience sucks, he or she will think the same about the company even in a subconscious way. I think incumbents are well advised to carefully look at what IT is trying to do, tech giants do, and the InsurTech start-ups, and the need to adapt to the kind of customer experience that people expect and want.

How do you think companies are leveraging InsurTech and FinTech to address business challenges?

InsurTech has started to lead the way to show what is possible with future innovation. The question for the big insurance companies is shall we partner / buy them or build it ourselves?

InsurTech has started to lead the way to show what is possible with future innovation. The question for the big insurance companies is shall we partner / buy them or build it ourselves? For the short answer, I would recommend partner / buy them, but allow the InsurTech company to show the direction and how to deal with challenges in the insurance business. That is the only business proposition they have to survive.

What impact do you think blockchain in particular will have on operational excellence in insurance? How do we get beyond the hype?

Blockchain will solve some issues within the insurance and banking industries, but it will not solve as many as people claim.

Eventually blockchains will have an impact, with issues like preventing fraud and that has a huge impact on the bottom line of any insurance company.

The bigger hope here is that blockchain will create streamlined processes and increase efficiency and productivity that will assist growth and revenue. However, I do not think we are there yet, although it is currently sold like a silver bullet solving all issues.

I do not see blockchain having any real impact in the insurance business in the next few years. It will solve some issues within the insurance and banking industries, but it will not solve as many as people claim. At the end, it definitely will help with costs and streamlined processes.

What is your vision for operational excellence in insurance in 2018?

Before the InsurTech companies it was harder to innovate because people were telling us we still make money, what do we have to innovate?

Many think that InsurTech companies are already showing how and where operational excellence can be enhanced by putting even more focus on artificial intelligence, big data, the Internet of Things and augmented reality, just to name a few technologies. These kinds of technology will define the industry for years to come, just look at autonomous cars that employ a hybrid of these technologies.

For the big players, the insurance companies who realize this and adapt, there is huge opportunity, and also for the start-ups. Others not adapting to what the insurance industry has to offer we will see serious consequences that will take many out of business. These new technologies will not go away, so if you do not include them in your business plan, then probably you will stand to be the loser at the end.

In general, we can say the whole insurance industry is very focused on digitalizing processes which will lead to operational excellence. The good thing about the InsurTech companies is that they force companies to push forward innovation. Before the InsurTech companies it was harder to innovate because people were telling us we still make money, what do we have to innovate? But now you say, if we do not innovate our competitors will overtake us, so it helps even the people within big organizations to push innovations forward.

What do you hope to bring to the 4th Annual OPEX Insurance: Disruptive Transformation Summit in September?

I hope through my support of FinTech and InsurTech industries and Invesco, and as adviser and a thought leader, I can help bring an additional perspective to where the insurance is or might be heading. Providing and sharing ideas on how to better technically prepare for the oncoming challenges and disruptive transformation

How prepared are you and your organization for the changes on the horizon?

Find out more from Spiros and 60+ insurance industry speakers and conquer the chaos and technology of today to become the insurer of tomorrow.

Only at the 4th Annual OPEX Insurance: Disruptive Transformation Summit, taking place September 18-20, 2017, in Atlanta. For more information, go to: www.operationalexcellenceinsurance.com

OR

Credits:

Created with images by juanktru - "Fast!" • qimono - "lightbulb bulb light" • _Jonas_ - "Road to Aspen"

Made with Adobe Slate

Make your words and images move.

Get Slate

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a Copyright Violation, please follow Section 17 in the Terms of Use.