by Chris Newman, Managing Director, Global
At first glance, one might assume that the rise of InsurTech was the disruption the London insurance market needed to go digital. But as insiders, we know that there is much more to our insurance technology story.
Disruption was certainly the initial InsurTech story, but we now recognise that the success of digitisation lies less in how startups disrupt and more in their ability to join and successfully integrate with the well-established insurance vendor technology ecosystem. This success will be driven by cohesion; together, the new London insurance technology community is aiming to digitally connect all market participants with each other and the global insurance industry, in a more efficient manner that also meets the complex regulatory and compliance requirements that are unique to the London insurance market.
We see the importance of this every day. ACORD is deeply entrenched in the London insurance technology community, working with London market carriers, brokers, vendors, associations, InsurTechs, and consultants to focus on using unified standards and cutting-edge solutions in order to drive efficient global data exchange. As such, we have a front row seat to the value that interoperability holds for the future of our industry.
This is the disruption the market needs – a realisation that to achieve interoperability, we need fewer silos, and more integration: the ability to speak the same language and perhaps even utilise the same pipes (more on this later). We are poised as a community to make this happen.
So what does this new and diverse insurance technology community look like? It includes three core areas:
- Well-established vendors or core system providers focused on end-to-end policy administration. These are both large and small technology companies that have been around for decades supporting underwriting and claims functions. Their role has advanced from system providers to strategic partners for their carriers and brokers. They are helping their clients comprehend rapid change, new initiatives, and how they fit in with existing systems and services. These core system providers are now undoubtedly more impactful with the broader perspective offered by InsurTech startups that have shined the light on the importance of the vendor role in modernisation.
- Newer InsurTech startups with discrete niche services and API connections that can complement and be plugged into the core system providers. These InsurTechs are collaborating and bringing fresh ideas to the market, tackling the pain points and helping us all think in a new way. These InsurTechs tend to fall into two camps. The first are improving a discrete area of the insurance business they see as broken – perhaps the founder sat in an insurance company or broker and saw a problem that needed fixing. The second are the InsurTechs that are looking to completely turn the applecart over by taking on the greatest market challenges with platform solutions looking to displace the traditional enterprise end-to-end solutions.
- Consultants and advisors that help the industry pull all of these pieces together. They play a vital role in offering both expert and unbiased recommendations and support services. These advisors perform strategic reviews of technology requirements, lay out a design and plan, and then help make it happen by assisting in strategy and every step of implementation.
And where do we sit? ACORD Solutions Group (ASG) is the vendor’s vendor. We are not only focused on leveraging ACORD Data Standards, but also on offering the pipes to properly link the insurance ecosystem and achieve interoperability between the key stakeholders in the end to end process, across different geographies and pieces of the value chain. Through ASG’s ADEPT, a new global data exchange platform, we are working with virtually all of the key insurance technology solution providers and leaders to help bridge connections where they are needed. Technology providers, at all stages of maturity, are able to leverage ADEPT with their own platforms, enabling the entire market to integrate seamlessly with one another. We are just beginning to scratch the surface of the possibilities when it comes to improving data quality, and ultimately helping the industry to connect and make better underwriting decisions. As an industry-owned entity, reducing costs, improving speed and data quality as the global provider of data exchange is our sole focus and our members' priority.
Change is happening and the community will continue to evolve. We expect to see:
- More cohesion as the lines continue to blur. Large vendors and newer InsurTechs will continue to collaborate and even combine. A great example is the recently announced acquisition of Whitespace by Sequel. A great example of joining up the end-to-end process and adding ability to scale, especially when you add Rulebook Hub and Verisk into the mix.
- The insurance technology community will find themselves with a seat at the table with significant market advancements such as Lloyd’s Blueprint Two and Core Data Record.
- A sustained push toward innovation. We must continue to be challenged. New InsurTech thinking is needed and the industry will continue to support innovation. For example, the Lloyd’s LAB invites innovative startups to a ten-week programme where they are partnered with mentors from across the Lloyd’s market to help them develop their solutions. And at ACORD, we have held the ACORD InsurTech Innovation Challenge in London for several years in order to seek out, promote, and nurture sustainable technological innovation for the insurance industry, benefitting insurers, distribution channel stakeholders, and vendor partners.
With all of this technology power, we have the tools to solve issues of connectivity and efficiency. We’ve seen progress leap forward in 2020. Together with a powerful vendor eco-system, we will achieve our digital destiny.