Many people in the insurtech sector know Bart Patrick, who left Duck Creek in 2021 and joined Genasys Technologies as Chief Revenue Officer. IE wanted to find out what prompted the move and what growth areas are out there for insurance brands.
IE: Bart it’s been a rapid trajectory for Genasys Technologies, what prompted the move from your angle?
BP: I really liked the way that Genasys were doing things and I was at that point last year where I did some thinking about what I wanted to do next – reflecting on what my next challenge would be. Genasys is all about digitally-enabling an insurer, MGA or broker – whatever their size – to power their business and because I’ve been in this industry for so many years, this innovative spirit and commitment was a real driver for me.
Since joining it’s been everything I expected and more – a fantastic Genasys team with a different approach to software, helping the sector say goodbye to complex legacy technology and say hello instead to a different kind of software solution that truly puts the end-consumer first. Genasys is all about delivering value-based solutions, rather than IT projects that never finish, if you know what I mean.
IE: We do. We have seen the IT bunkers being built at insurance brands, complete with Star Trek sliding doors and designer kitchens attached! So is there still a way to go in the insurance sector as regards transforming legacy systems?
BP: You know, I’m not that keen on the word ‘transformation’, often it isn’t that at all. It is a process that in reality adds layers of software but stops innovation. The other thing about lots of grand transformation projects is that they don’t deliver for mid-tier brands. So a big insurer may need a totally new system, or series of them, but mid-market needs can be quite niche, specific. So why build a wrap-around system that does everything, but is perhaps only 40% used in everyday business cycles?
The great thing about Genasys for me is how the product has a totally flexible API hub; you can bolt on, or remove whatever you want. It offers control and customisation, just fabulous software. That got me fired up, it’s something where you can see how useful it is for the market – at every level.
IE: Has some software been oversold as a ‘one system to rule them all’ solution in the past?
BP: In some circumstances yes, but people made the right decisions for them at the time, for good reasons. I don’t like the software procurement process across the insurance sector in general and I feel that right now lots of people are starting to ask ‘why do we need this, where’s the cost-benefit analysis?’.
Okay, let’s take the car insurance market in the UK as a case in point. You have FCA regulations asking that consumers are rewarded for loyalty with lower premiums, but you have huge inflation of asset values in the used market, plus rising repair costs, storage of salvage vehicles and so on. That situation cannot be solved with software, it needs a price re-alignment, a market correction – simple as that.
So when brokers, MGAs and others realise that the old aggregator system will be challenged by a general inflation in costs, what can they do? Installing a new software package won’t work unless it allows you to rapidly deal with price volatility, stagnation in particular niches, regional variations and so on. You can’t keep discounting just to hold market share, so you have to develop a system that delivers real value, to the customer, and to everyone else in the car insurance chain.
I can see the same inflationary pressure in the home insurance market and the same outcome. Selling on price won’t work, you need to deliver value propositions to the market. The cost of getting repairs done in properties now is skyrocketing as the demand for tradespeople grows – demand outstrips the availability of this expertise. In some cases, it’s really difficult to get tradespeople to take on jobs, especially if they’re long-distance. That and the claims price rise has to lead to a market correction in premiums at some point, it’s inevitable.
So if your existing tech isn’t working out all that claims cost movement, and where it’s going long term, then who is going to pay for that FCA discount?
IE: An interesting problem for sure. Do you think that the industry needs to re-think training in some ways, now that low and no-code systems mean anyone can build their own software system? So many insights from staff in marketing, claims or even admin could be fed into a flexible system.
BP: There are some very smart people keeping the lights on in many insurance brands – I’ve met them.
People within IT departments can usually spot where there is a software problem and come up with ways to fix it. The important factors though are about having high standards within your own brand and having the software system in place so that things can change rapidly and you can innovate from within. Then there’s the mid-tier mindset that because your company isn’t big you therefore cannot have the best software systems. That simply isn’t true, good software is tech fertiliser – it stimulates growth in any business because people like using it. So then they get the best from it.
In my view, legacy systems can promote legacy thinking, as in ‘we leave the software to the IT dept’ and don’t get involved. It isn’t that people need training, so much as people need space to help new ideas flourish – the software is just a tool to make the great ideas become a reality.
IE: Insurtech is about seeing gaps and coming up with solutions, can you suggest one area where insurtech can still score a win?
BP: Mid-term adjustments is one. This is something that gets in the way between brands and consumers, plus you really need a low cost, automated fix, that can be delivered at scale. So many systems rely on the manual input of data, even if there’s a chatbot on screen, and so that admin costs money and you end up making a charge for it, or the MTA costs you a chunk of your margin on the policy.
Talking of scale, another area where there are gains is scaling down systems. So many software solutions can be scaled up for bigger players, but scaling down to service a niche broker for example can be a challenge. What you want to do is use tools to improve the customer journey for that niche insurance brand, keeping it simple and not get lost in building something that’s just too big.
IE: Future growth markets and trends, any thoughts?
BP: There’s room in cyber definitely, especially in the way cyber policies are now written post-Covid. For many smaller companies cyber cover is still way too expensive, so we have to find ways of building affordable products.
I think it’s inevitable that electric scooters will be made legal at some point and then you have the question of insurance for a relatively low cost vehicle, that can cause serious injuries in rare cases. There’s also more growth ahead in pay-per-mile cover, as people give up on ownership of cars and look to hire on-demand instead.
ESG related insurance is set to boom, which is all going to be tied to increasing regulations on marketing, distributing and making products. Losing your accredited ESG rating will be a big risk in the future for any business.
Then there’s embedded cover. The time is ripe for hybrid home and repair insurance as one product, not a series of stand-alone services. It isn’t rocket science to join up repair and maintenance plans to the typical home policy and the market is ready for that.
IE: Interesting stuff Bart, thanks for your time.