An insurance company is a remarkably complex organization. Underwriters must write and renew policies for a book of potentially hundreds of thousands of properties. Claims adjusters must respond rapidly to losses, while also not allowing fraudulent claims to go undetected. Throughout all of this, insurers strive to improve their combined ratio and keep their customers happy. It is an overwhelming amount of work. Often it seems like more than a single company can handle.
Thankfully, insurance companies are not alone in this process. The secret to succeeding and evolving as a company – without stretching resources too thin – is for insurers to partner with insurtech startups. In the last several years, a large number of these startups have entered the industry. By applying innovative technology to specific business problems, insurtech startups like Betterview help insurers to predict and prevent losses, optimize efficiency, and build a better relationship with their customers.
The main advantage that insurtech startups offer to insurers is their ability to hyper-focus on specific business challenges. Whereas insurers must carefully allocate their resources across all the needs of their organization – making it difficult to invest time and budget into innovation – insurtech startups are free to zoom in on solving one specific problem. For example, Betterview initially set out to solve the problem of attaining a complete, actionable view of roof condition. We were thus able to create a product that fit the needs of insurers without the insurers themselves having to expend time and effort.
Another advantage is that these startups are often staffed by industry experts who understand the problems faced by insurers on a deep, personal level. Whether they were agents, underwriters, or claims adjusters, these insurance veterans have seen firsthand the complexities of the industry. Their knowledge and experience informsinform the solutions that they build, so that insurtech products can fit the actual needs of insurers. Betterview has always valued insurance expertise in our hires. Our co-founder and COO Dave Tobias got his start in property inspections, and it was the issues he saw there that formed the architecture of the Betterview Property Intelligence & Risk Management Platform.
A hyperfocus on solving specific business problems, and a reliance on industry expertise: these are two of the main ways that insurtech startups add value to insurance companies. The biggest advantage, however, is the way that these companies empower insurers to work smarter, not harder. By relying on insurtech startups to augment their own processes, insurers can expand their business and improve their combined ratio without complicating their existing workflows.
For example, say an insurance carrier writes a lot of policies within the Hail Belt. In order to better predict and prevent damage, this carrier needs a clear and comprehensive view of roof condition on every property. Acting alone, they face an uphill battle and an intense amount of labor. They would have to acquire reliable imagery of all these properties, and either evaluate condition manually or build their own AI tools to analyze risk. This is especially difficult as reliable inspections become harder to find at a scalable cost. If the carrier partners with an insurtech startup, however, they can gain access to high-quality aerial imagery and a suite of computer vision detections that will tell them which properties are at risk, and what actions they can take to manage this risk. The carrier now has a solid, actionable view of hail risk without compromising their own company resources.
Whereas insurance companies succeed by looking at the big picture, insurtech startups leverage their expertise to solve more specific problems. They can even be thought of as consultants, or an outgrowth of the company itself, rather than as a totally separate entity. Insurtech partners should be evaluated carefully, as they can make a major difference in the future of an insurance company. When the partnership is successful, insurers can make immense gains in productivity, efficiency, and reliability for their customers.