Industry Technosavvy the November 2019 issue

Creative Spark

Q&A with Eugenio Gonzalez, Co-Director, Plug and Play Insurtech
By Michael Fitzpatrick Posted on October 29, 2019
You’ve taken a new leadership role at Plug and Play Insurtech. What are your goals?
We want to keep building on all of the successes of [former Plug and Play Insurtech head Ali Safavi] and expand not only the reach that we have so far with corporate partners that has enabled us to scale to offices in Beijing, Singapore, Tokyo and Munich, but also as we grow we want to deepen the relationships we have with existing and new corporates. By that I mean helping them on their journey of innovation with the existing offerings we have but also the new wave we are exploring.
What are your corporate partners looking for?
There’s no easy answer. It’s more of a case-by-case basis. We work with players across the entire value chain—insurers, reinsurers, brokers and even software providers or consultants—and they all have different needs. We like to segment our corporates into three different categories. Some of them are just dipping their toes in innovation, and they come to us because they want to see what’s out there and what’s exciting and bring in their leadership team or business units.

A little bit later down the road they’ll get engaged with startups, fund POCs [proof of concept projects], pilots and eventually ingrain them in their everyday workflow or partner with them to launch new products.

Then there are the more advanced corporates, the carriers that are working side by side with startups in a collaborative innovation environment that enables them to get faster to innovation, faster to obtain new distribution channels and faster to implement new tools and resources. As they scale in progress, carriers are now investing alongside with us.

What trends are you seeing in terms of focus for startups?
I would say that the main focuses for Q2 were distribution and underwriting. Because the cost of acquiring each customer is getting higher and higher, distribution is obviously one of the biggest concerns. There is a ton of interest in startups that can provide better access to leads or distribute products in more seamless ways, sometimes bundling them with fintech products.

Underwriting—data is what everyone is after. How do you leverage new insights in a way that you can price the risk correctly? At the same time, if we go too granular in the data, are we forgetting the fundamental benefit of insurance, which is pooling people and the risk in a way that we can provide coverage to folks that are perhaps more in need? If we can leverage insights, for instance, that we can get through 23andMe, are we going to deny insurance because someone has a genetic trait that they can’t do anything about?

What trends do you see in technology?
On the claims side, augmented reality is one of the strongest ones that we’ve seen so far this year. A lot of interesting startups are doing things with AR and how you can leverage that to do first notice of loss, do a video, and more accurately provide data to the carrier so that it can easily go through the claims process in a way that it’s not only paying faster but more accurately calculating what the total loss was.

Blockchain—that’s one of the few areas where we feel the corporates are actually running away from. For better or worse, there was a lot of hype a couple of years ago, and now I don’t think I’ve seen any requests for startups doing something on the blockchain space for all of 2019.

Insurtech is very much a global phenomenon. Where are the opportunities outside the United States?
There is an extremely interesting space evolving in China. A lot of our corporates are looking into that space because of how Chinese insurance companies have been growing over the past few years and what they can do with data that is a little bit different than the way data is treated here. For better or worse, the Chinese government has a say in how that is shared and managed. Because of the size, it’s just a great market to be in right now. You see Ping An, Zhong An and PICC working on some super interesting stuff with ecosystems. How do you build an ecosystem of payments so that you can actually provide financial products more seamlessly on your phone?

Singapore is another place we love. English is a great way to bring down a lot of the barriers. A lot of our corporates are looking at leveraging Singapore as a gateway into Asia.

Latin America—we’re opening up one of our newest offices in Sao Paulo—that is also an area that’s very interesting given that you have a market such as Brazil that is massive. Argentina, which was also very interesting in our eyes, but with the current political situation, it’s a little bit more on the back burner. We feel that Brazil is the next market that we want to open up.

What does it take to succeed as a startup today?
Especially within insurtech, the Silicon Valley mantra of move fast and break things doesn’t really work. You need to build a lot of relationships with different stakeholders. We had the NAIC here recently, and regulators would probably agree that, if you go too fast, you’re going to get shut down. You need to know who your stakeholders are, and you need to build relationships with them.

Not only the NAIC but also because of the constraint that startups have in terms of money, which translates into runway, you’re competing with more established players like corporates that are spending billions in marketing. What’s very interesting is that—unlike other areas of the market—within insurtech, it’s a great place where relationships are built.

Startups will go the MGA route and partner with a carrier for capacity, partner with a reinsurer. What you need to succeed in this space is to build long-lasting relationships with different stakeholders.

Tell us about your meeting with the NAIC.
Unlike other regulators, the commissioners are very on top of everything that is happening right now, and they want to be a part of that change. You probably read what Kentucky is doing in terms of its sandbox. It sees that as shaping the way that the rest of the commissioners are going to build relationships with startups and other stakeholders. You can see what India is trying to do in terms of its sandbox. The FCA in the U.K. has its own sandbox.

Regulators are definitely building a more collaborative approach. They don’t want to be the ones shutting down new products that are going to provide customers with protection. Ultimately, we are talking about providing them with new ways that they can be better served by having coverage they didn’t have before or at prices that are more accessible to the public.

Michael Fitzpatrick Technology Editor Read More

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