Are we there yet? From London to New York – where are we on the insurance innovation journey?

We’re almost a decade into the emergence of insurtech. Has anything really changed and who is winning the war of innovation. The US or the UK?

Despite being based in London, our InsTech community is global. More than half of the people in our 30,000 community are from outside of the UK. We’ve worked directly with many of the biggest names in insurance, from start-ups to the giant brokers, technology superstars and the reinsurance old guard. 

We’ve learnt a lot through speaking to people around the world for our podcast, webinars and zoom meetings. We know what works. We know even more about what doesn’t work. But nothing quite beats getting to see people face to face. 

So we took InsTech on tour earlier this year. In March and June we borrowed the conference space in a couple of Google’s offices in New York. We brought together some of the successful companies from the UK such as Cytora, hyperexponential, AdvantageGo, added in a couple of US grown success stories (Guidewire, Kroll, Indico Data) and were supported by Aon with its own Strategy Technology and Consulting Group. 

But most importantly we filled the audience with insurers and brokers. And joining us on stage were some of those at the sharp end of driving change in underwriting in US insurers including Liberty, Zurich North America, Allianz Commercial, Tokio Marine HCC, Arch Capital and Swiss Re.

So, what did we learn?

Martha Notaras, Partner at Brewer Lane Dolphin celebrated the shift from the disruptors of InsTech 1.0 who tried to insist that new must be better, with the more successful approach of the survivors in the last decade. “If you can say  ‘I will save you money, I will save you time and I can measure it’ then people will listen. We all need innovation but a reminder that wherever you are in the world, these days tech needs to talk sense. 

Some reinsurers and speciality insurers have been very successful in the fine art of juggling accurate risk pricing, diversified portfolios and going big in a hard market (when prices are high). Others have failed catastrophically.

Wherever you live in the US  you are likely to be directly exposed to at least one, and frequently more, catastrophic perils. Earthquakes and wildfires. Floods, hurricanes and tornadoes. Hail and freeze. Your house is made of wood and plasterboard (Gyproc) that burns, swells or goes mouldy.

Hurricane Beryl, the earliest ever category 5 hurricane, made landfall this week in Texas. It may have calmed down to a less deadly category 1 hurricane by the time it hit the US, but we are only at the start of the hurricane season. 

Here in the UK we get our share of bad weather but our houses are more solid and rarely blow over, fall down or get totally obliterated by wind or fire. When bad stuff happens in the UK it’s usually very localised and mostly involves things getting wet. 

What this means is that most underwriters in the US have had first-hand experience of an extreme peril or know someone who has. There is a context to their risk assessment and pricing. Catastrophic risk is a material part of the insurance pricing in the US. In recent years increased losses and concerns about the growing perils of wildfire is leading to insurers withdrawing from states rather than covering risks they don’t fully understand. 

It’s not only underwriters that feel the pain. Sarah Russel, CEO of Bellwether, a Google X spin-off, lives in California and knows about the impact of wildfire risk. I asked Sarah why she and her Google colleagues had decided to start with wildfire. “I was looking for a hard problem to solve and climate is one of the hardest”. You can find the full story of how Sarah is leading the development of Google’s earth prediction engine from my interview here.

A theme emerged a number of times over both of our events of the time wasted by underwriters having to do unproductive administration work – up to 50% of the day in some cases. Underwriters are paid to select risk, price correctly and meet with brokers. 

This latter point is a particular issue in the US. In London an underwriter and a broker are rarely more than 10 minutes walk away from each other. A lot can be done remotely now but for the more complicated risks face to face meetings may still be necessary.  For many US  underwriters that means flying not walking. We saw a lot of consistency in the need for greater efficiency in selecting risk and accessing better data on both our panels of insurers at each event. Despite the challenges, it was encouraging to hear the optimism with the emerging technology and solutions available from our sponsors and others. 

Insurtech tended to be more focussed on retail and homeowners in the US, whereas in the UK we’ve seen more success from new approaches in commerciality speciality insurance. In 2024 we are seeing more growth in insurtech companies from the UK expanding into the US than we have noticed in the last 10 years and most of these have a focus on speciality business. There is not a lot of traffic in the other direction.

Catch up on our March New York panels and our most recent event in June.