The industry has historically been very paper-driven; now several startups are aiming to digitize paper forms and find ways to extract the data and move claims along more quickly.
“We’re at the point where if you’re a carrier and you have a paper file room and you’re not able to analyze that data to make better underwriting decisions, you need to start there; you don’t need to go into the unstructured world,” Gritz says. “Most startups are just not there in the unstructured space. But you can just solve the easy problems first.”
Buying life insurance has traditionally been a drawn out and invasive process, Mallee notes. Applicants must complete a lot of paperwork, provide medical information and then wait several weeks for an answer that may turn out to be no. MassMutual has created a platform that aims to make the process digital and employs algorithms to give an automatic yes or no in a significant percentage of cases.
“A millennial customer can better understand going online and filling out an application in two seconds and getting an instant approval,” he says. “This also makes the advisor experience better because it’s not as intrusive – the technology can go in and ask the intrusive questions. You have to educate your advisors on how to use the technology, but it’s incumbent on the carrier to make the investment.”
Mallee adds that MassMutual made sure to involve end users – in this case, the advisors – in the development process. “It’s hard to sit in a home office and know what the customer wants.”
Legacy companies may be leery of changing processes that have worked for years, but startups can start to surmount that obstacle by explaining how their technology or product can “solve an enormous problem or help them create an enormous opportunity,” Keogh says.
“Insurtechs need to come to the discussion with a tremendous amount of humility,” he says. “The idea of the errant insurtech coming in and saying, ‘I’m going to bury you,’ doesn’t sell. You have to approach [companies] with genuine curiosity. They know everything you need to know and if they don’t like you, you’re not going to get it out if them.”
So far, a lot of the activity in the insurtech startup space has been focused on property and casualty insurance; going forward, Gritz sees lots of opportunities for companies focused on providing solutions or tapping new markets in the life and health insurance sectors.
No matter how things shake out in the industry, the panelists said there is always going to be a role for the human touch in the industry.
“We have a special needs planning department – I don’t think a bot is going to be able to do that,” Mallee says. “We have to make sure the a direct-to-consumer company can’t come in and replace us, so we have to become more specialized in the advice we provide.”