Insurtech Focuses Increasingly on AI

BrokerTech Ventures’ fifth BTV Mania suggests what is in, and out of, favor in technology funding.
Sponsored by BrokerTech Ventures Posted on June 17, 2024

There, the 10 startups that comprise the accelerator’s 2024 cohort met with all parts of the insurance value chain.

Despite the lower level of insurtech investment this year across the industry—Gallagher Re reported that investment levels were at their lowest in four years in Q1 2024—BTV community members like Adam Hoover, vice president of business architecture and innovation at The Hanover, remained positive about the future of innovation in the space. “The study also showed that while funding dollars per funding round for any startup has decreased, the number of early stage and total deals both increased quarter over quarter, creating a healthy flow of newer entrants,” Hoover explains. “So a lot of [the decrease] has to do with fewer late-stage mega-rounds but that did not slow an influx of artificial intelligence (AI) solution providers from entering the market.”

The AI-Enabled Backend

Indeed, according to Hoover, this year’s cohort is focused on AI-enabled products. “There was a lot of AI—generative AI but also more traditional applications of artificial intelligence. Some that made it into the cohort were specifically focused on policy and coverage comparison [with AI].”

Brokers can face challenges with consistency during policy and coverage comparison, Hoover notes. For example, when a broker compares two policies, even if they have been doing that job for years, there is no guarantee they won’t miss a difference between those policies. But the startups in this cohort brought consistency to their outputs when comparing policies and coverages.

Complex document review can also be streamlined using AI, says Hoover. “Claims-related documents, for instance, can be really challenging to review and to understand all of the nuances. Being able to query that and quickly get the information you’re looking for were advancements that we saw this year.”

Overall, for Hoover, the dominant trend in this year’s cohort is the increased focus on workflow and efficiency by leveraging AI tools.

Bringing the Insurance Value Chain Together

While the startups are central to BTV Mania, Hoover says the event offers a space for each part of the insurance value chain—broker, carrier, investor, and so on—to collaborate on solving common problems through targeted group meetings each day, with discussion topics collectively decided on beforehand.  “The Hanover is proud to sponsor BTV as it helps us stay close to our distribution partners and what technologies they view as innovative or transformative to their business including how we as carriers interact with them. When you have carriers and brokers both willing and open to sharing their experiences, their views, and their approach, it’s better for everyone,” he says. “It’s better for us as an industry and it’s better for the end consumer.”

One key conversation involved the transfer of data between brokers and carriers. “It can be cumbersome. It can be repetitive. There’s a lack of standardization in that information that makes it hard for us both to share and to process it. We all complain about it, but we never get to sit down and talk about what we can do and how we might approach it differently,” Hoover explains.

Another aspect of that collaboration happens between startups and carriers and brokers. “Startups join BrokerTech Ventures to get wider visibility, but also to validate their own hypotheses and paths forward,” Hoover says. “You’re not going to be able to get the type of carrier and broker feedback in as condensed of a time frame as we’re able to provide at BTV Mania. You can walk away as a founder with the knowledge to make some good but hard decisions about whether or not you’re going down the right path or whether or not there is a better way to approach what your company is doing.”

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