Michael Howard Jun 29, 2021 12:31:00 PM 16 min read

Neo-insurance, data and tech

This blog comes from our interview with Jason Roberts. Jason is the Executive Director of FinTechNZ (acting) Founder and Chair of Insurtech NZ and Co-founder of Global InsurTech Alliance. For the full interview listen to Episode 9 of our podcast Beta & Beyond.    

Can you tell us a little about your tech journey into the insurance space?

Jason: My interest around involving or being involved in insurance came out of that desire just to help improve it. And about four years ago through the help of Mitchell Pham and Helgen Software and of course NZ tech, we founded Insurtech New Zealand under FinTech New Zealand their wonderful parent group to help us. That’s grown, it's been quite cool, and then threw that into the global inshore tech Alliance, which has now a network of I think it's 17 insurtech groups around the world.

The whole Neo movement has been gaining momentum lately, particularly in the banking space in the US, UK and recently Australia. How do you see this playing out in the New Zealand insurance space?

Jason: Right, well, I think we've got a couple of dynamics to think about here. One is many of our insurers around Australia you know all the big ones basically, or Singapore, America, very few actually in New Zealand are made in New Zealand for New Zealand. Now we got funnily enough our biggest insurer ACC is definitely a kiwi company and very powerful in the market. And you know, they're important, really important. Then we have the life insurers, you know, the fidelity's, the partners life and so on, and then from a foreign general AA insurance, although I don't actually think they’re owned by New Zealand anymore. But you have to think with the lens of what do we need in New Zealand for New Zealand? When most of our owned companies are actually owned from overseas. So I think one of the dynamics in the market is that we're actually not getting best fit for New Zealand. And what's really interesting then is what does that mean for insurtechs?

So insurtechs are coming through, they're here to solve a problem. And all of them are going Gosh, we've got a problem around often customer experience, sometimes things like actuary, you know, back-end technologies, and so on. And and what you're seeing now around the world is that most of the insurtech's if you look at the people who run them, or start them found them, they tend to be people from within the industry who have gone 'Hang on a minute, this isn't working, I can do something different' or better. And around the world that is a dynamic.

And what you're seeing now is a bunch of folk going, we can go out, because guess what, we've got new technology, we've got new opportunities, got a training plan, we can do stuff.

So you've got this really strong driver happening everywhere. And it's really meant that companies are having to adjust the way that they respond. And it brings up things like, gosh, you know, what, we need tech talent, we need people from inside, we don't need, we don't need to look inside to solve our problems, we need to look outside. And this is this whole concept of partnering. And by partnering, I mean, talking with, actively engaging with insuretech vendors, solution providers, technologists, and others who have an influence, and also actually fostering talent. So how do we make for a better word insurance sexy? For some young dude, who's getting into PA or a developer, how do we make our environment interesting enough for them to really go, I want to be in the industry. I mean, it's an industry that in my view, has always had a bit of a male, stale, pale problem. And and I think when you've got this ability for insurance to be seen as exciting and attractive, you actually have to really partner.

So the partnering takes a number of dimensions. Some of it has to do with internal problems, let's get good talent, let's bring them in, get them involved, make it sexy, and then we can start internally adapting. And, of course, incumbents have great customer databases, they've got their relationship, they've got all of the products and solutions, really, they can just expand on that if they have a more technologically friendly environment. Partnering, though, it's really important.

But insurtechs have big problems, like all startups do, they have, you know, fit for purpose, are we the right product market fit? That's always a challenge for any sized company. Do we have the financial runway to engage with an insurer who might take years to engage? And then how on earth do you get the best product market fit. And this challenge is universal. But I think it's especially powerful in New Zealand, where we haven't got this open marketplace of partnering so well developed yet.

The good news is, is in the four years that I've been involved in insurtech we've gone from, you know, when we first founded insurtech, incidentally, with a number of incumbents, bunch of insurers and vendors, we've gone from, you know, just, you know, what, I think was perceived as a disrupter or a challenger. You know, an unknown space is now being seen as gosh, you know what, these guys really are augmenting and supporting our own innovation. And it's been wonderful for the likes of the Financial Services Council and others to invite us to be involved in having streams at their events where we can talk openly about the impacts of AI or customer experience or data, all of which actually changes that playing field. So I think partnering is a really big part of it.

And behind this, one of our goals will be to grow the understanding that it's the place that you can invest. If you're, if you want to become an angel investor or a shareholder, you know what, insurtech is starting to be a thing. You have to realize the nature of your environment. When we wrote the EY insurtech report around and insuretechs, only two years ago, I think of the 20 companies that we identified, only two have for lack of a better word gone out of business. From a startup success rate, it's actually really good. And what we're seeing the last year or so as a number of Australian or international companies now coming into New Zealand on which we weren't seeing before. So clearly, we're being seen as a place to come. I hope that answers your question in a roundabout way.

So how then do incumbents need to adapt in order to deliver the same kind of value to their customers?

Jason: Yeah, I think this really is getting into this whole area of front end experience, Gartner refers to a term called title experience TX they call it. And that's number two on the Gartner hit list at the moment of what you need to really focus on. But what it comes down to is, if I'm a customer, when I engage with you as an insurance company, I want you to know who I am, I want to know that wherever I touch your company, call centre, email, insurance broker, whatever it might be, I want to know that you know me, that the products or services are in-tune with my interest or timeliness of what I'm doing with you, that it's very personalized. And you're not sending me stuff that's out of context. So, you know, a typical thing I've spent ages trying to get through on the call center on my chat bot, I've been trying to get the answers, but I may or may not have got, but guess what, they're completely out of tune. Maybe the email marketing message, saying well done for doing this, is actually what I've already bought that I'm on to this now. So what you're seeing, and this is actually quite exciting. Data is the key to understanding where a person is on the customer journey. And many insurers now, and there's a few great Kiwi companies, are going we really need to investigate CDPs because our data is siloed across multiple areas, you know, the front end, email, call center, SMS, chatbot, channel broker, they're all at the front, at the back end, or legacy problems.

So how do we, if you're an IT guy, how do you stitch together all these data points? Well, it's a logistics nightmare, spaghetti problem. The rise of customer data platforms, essentially, in real time, can be connecting all of these data points more of a hub and spoke concept really, where the customer if they’re involved in the customer journey, because that information is being received in real time, and personalised, it can push back out all of the other systems that are connected to it in real time, so that when you come in through your contact center, the agent actually is already aware that you've been engaging on the chatbot. So what we're seeing now I think, is really wonderful. From a marketing technology point of view, which I love is this whole area, which I always dreamed of, and I had my own email marketing company is we can have real time, personalised conversations that aren’t silo’d anymore. And that, I think is a major opportunity for insurers.

But one of the biggest problems insurers have, and this is where the advantage lies, with insurtechs is, insurers have data everywhere.

They can't find it necessarily, they can't shape it. And the fact that they have obligations as an insurer to give you correct information, they run the risk of funnily enough, data is more of a problem than a lack of data. Because what if we send you the wrong information, or the wrong legal doc, or the wrong piece of the customer journey, we now find ourselves in front of the FMA or reserve bank or, even worse, being a brand problem and the media because we've accidentally disclosed some private information. I'll give you an example. This is you know, I'll never name the company. But when the Christchurch earthquake happened, I was given the database sent through email marketing software, this is a live link. And the insurance brokers have been putting in the first name ‘deceased’. So not necessarily someone who died in the earthquake but simply that they were no longer a customer or whatever. So I was given this database to send a campaign to say, hey, customers, we’re right behind you, you know, we're here for you as an insurance company. Guess what? The first name field had ‘deceased’. Now imagine if that campaign had been sent out to the recipient with that name. Now, that is the brand risk that many of them face through data. If the data isn't right, or it's misplaced, or it's incorrect, you run the risk of terrible brand problems, or even worse landing yourself, you know, in front of some kind of board or legal action, so they don't want that. Whereas insurtechs, funnily enough, don't have that problem. Because the data tends to be very singular to do with the solution they're providing or simply they haven't got that bloat problem yet. So this is where this partnership of insurers working with insurtech's to give quite good, almost single point solutions through the insurtech channels can be really empowering.

This is just a snippet from a great download from Jason on the industry. To listen to the full interview go to Episode 9 of our podcast Beta & Beyond.


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