In this piece, Nikolaus Suehr, co-founder and CEO of KASKO, looks at how big name insurance companies get the best results from working with insurtech start-ups. With billions being invested globally, and a race to market always a feature of launching any new insurance product, it’s wise to look at smoothing out the process as much as possible.
To the Davids of the tech world, the digital revolution is nothing new, in fact it feels quite old to those of us who have been at the frontline for a few years. But for many Goliaths across multiple sectors, digital transformation is still very much in its infancy. But rather than feel threatened by the increasing pace of technological change, large corporates need to see startups and innovation as a partner and benefit.
Collaboration between the two isn’t something new, but still, we see numerous cases where neither party understands the needs of the other quite right. A heavenly partnership is hard to come by, but here are just some of the steps to take to work with the best tech partner for you.
I’ve Got 99 Problems
Before looking at what technology is out there, find a way to understand the areas of your business where technology could make an impact. From your client or customer side to internal operations, there are many areas of your business that could be improved through technology. Find a few of your biggest challenges, where you have the potential to solve a problem that could have a considerable return on investment for your company.
Once you’ve outlined where you could make some inroads using new innovations or a partner, you need to do the research. Shiny and loud doesn’t always mean better. The tech industry and the solutions available are growing at a rapid pace. Within each pocket of every industry, there is a startup shouting that they are the best solution. Funding rounds, attractive VCs, scale, and some well-placed customer names, don’t always
mean they are the best fit.
Go into business with the right partner, one that brings you the technology you need to genuinely offer a better service internally and to your clients and end-users. Focus on product-driven decisions, where the end-user will be involved. Work with the company that understands your needs and the need of your customer. Don’t splash big on the first thing that comes along, you are the established firm in the space, you might well need modernising, but the team you are going to work with needs you too – there is a symbiotic relationship that needs to be respected.
Just because your competitor has made headlines in your space with a fancy new tech product, it doesn’t mean everything is over. Over and over in the world of startups we see major investments and partnerships and headlines explaining global domination and by ten months later, the cracks appearing, the corporate restructure and then the acceptance that it wasn’t all that good.
Run Tests & Set Targets
Startups are often born out of a design mindset which encourages failing fast and revisiting. They will not be afraid of a pilot and proof of concept tests – you have given them a chance to prove themselves and they will work their socks off, grateful that they have their shot in the major leagues. Build an atmosphere where creativity can flourish.
Of course in the insurance market, there are rules that cannot be broken – set some ground rules and agree on criteria for a successful proof of concept. You are well within your rights to focus on leading performance indicators such as sign-ups, conversion, retention, revenue-per-customer, cost savings etc.
It goes against the grain, but new ideas and services take time, even the most adaptable startup might not get it right straight away – they won’t be exposed to your whole customer base from the off, so relying on traditional measures will lead you to shutting an idea down before it has really got going.
Stereotypes might dictate that these startups are often lazy, entitled workers, but in my experience, I have found the opposite. They work as hard as any other (if not more) to get things done and prove that going into this world was the right choice. Agree on deadlines and clear goals – what results are you really looking for and how you are going to measure them. Make sure you are on the same page from the beginning.
You are always going to be in the strongest position when negotiating a deal. But one of the other positions you hold is the ability to provide feedback that shapes the service to best fit you. Understanding that startups iterate on their products means you have the ability to help them make the very best solution. One that works even better for you.
You should adapt some ‘Startup’ thinking, and provide dedicated feedback or a dedicated team member to make sure that anyone actively working with the startup understands that they don’t have to accept the product, as it is.
Together you can make it better. Consider yourselves as investors or advisors, if they succeed by adjusting to what you need, you will do too. One of the biggest reasons things can break down is because there is no feedback.
Trust is a Two-Way Street
If you look to have dedicated a senior member of staff working with the startup you bring onboard, they will accept that as a sign of being taken seriously and strive to impress – they will also have a person in which they trust their ideas – someone that starts to understand them but inherently knows the market they are breaking into.
Make sure this person has an influence on decision making in the company and someone that knows the big picture so they can quickly communicate the new thinking to the relevant stakeholders. A strong relationship and understanding from the beginning are key – you need to be able to lay cards on the table and have open and honest conversations. There’s no game to be played here.
Fall fast and break things
Startups offer the potential to help you hugely, they are an experiment, but an experiment where there could be groundbreaking discoveries for your business. If you are going to learn one thing from them, fail often, fail quickly. You will learn a lot about yourselves and your company on this journey – keep the respect on the table and there is potential for all sides to benefit. It isn’t us v them anymore. It’s us and us.
If it works, you need to find a way to make it stick. Having an initial plan of how to roll-out solutions across your company quickly and effectively early on will save huge amounts of time if everything gets the green light. As with many walks in life, the opportunities for collaboration between little and large are there for the taking – in Insurance and InsurTech we have slowly started seeing that the doors are opening. Do be
careful, but don’t ignore this exciting new world.