Three Things InsurTech Startups Must Remember when Seeking Insurance Partnerships

My friend George has written an insightful post on why insurers should seek to collaborate with start-ups - https://www.linkedin.com/pulse/insurance-insurtech-case-collaboration-george-kesselman?trk=prof-post. From a start-up’s point of view, this collaboration can often be a no-brainer. You get access to the insurer’s scale, capital, regulatory know-how and brand. This post focuses on 3 key steps start-ups can take to successfully establish a partnership with insurers.

Think pilots before scale

Insurance is about risk mitigation. So, it should not be surprising that insurance executives prefer to pilot new approaches before scaling – even if you have proven your technology in another domain or even with another insurer! Also remember that the insurer may not have a defined budget for your specific solution. By proposing a pilot, you de-risk your ask, earn brownie points and start establishing the credibility needed for a lasting partnership.  

Focus on benefits not features

This might sound like stating the obvious, but an incredible number of start-ups still make this rookie mistake. It’s great that you are using a blockchain to secure genome sequencing results – but why should the insurer care? You need to instead focus on highlighting the benefits that will accrue to the insurer. This should typically be one or more of the following Ps:

1. Persistency: Your solution will increase the number of customers who will renew their policies.
2. Proximity: Your solution will increase the number of touch-points that an insurer has with their customer.
3. Profitability: Your solution will increase the amount of money that the insurer makes

Needless to say, you need to be able to show how (a) you will measure the benefits that your solution promises and (b) how those benefits outweigh the costs of implementing your solution (getting internal buy-in, training, administration, etc). Think of ways to remove the friction in implementing your solution.

Go with a defined ask

Insurance executives are busy people. So don’t leave it to them to work out the details of how to partner with you.  Go to your first meeting with a well-defined and costed pilot plan.  Another advantage of this approach is that it allows you to set the defaults – the price negotiation is likely to happen around the anchor established by you (subject to being broadly reasonable) and not the insurer.

#Collaborate

After you have thought through the 3 steps, you still need to land meetings with the right insurance leaders.

Platforms like InsurtechAsia help pave the way for Asian start-ups by hosting events that promote collaboration, connections and actionable dialogue. On 18th May, InsurTechAsia will be hosting ‘Insurance Collaborate’, an event that will bring together insurance corporate leaders, featured Insurtech startups (Latize, WaveCell, PolicyPal, UeX and uHoo), and investors in Singapore. The aim is to accelerate the pace of partnerships in the region.

Disclaimer: This is a personal post. The opinions expressed here are the author's own and do not represent the views of his employer.