Noldor helps MGAs aggregate, normalize and report program information to business partners via APIs.
Horneff talks about how insurtech has moved from disrupting the industry to improving it.
I tend to see entrepreneurship and startups in general as being things that must be personally experienced first for entrepreneurs to actually want to solve them. That’s why, if you zoom out 20 years ago, what were we really focused on? It was social media. Why? Because a lot of the developers of the day were in their teens and early 20s and they got access to that. Fast-forward 10 years, and those same developers are now in their late 20s. And they start thinking about, well, how do I save money in my personal finances. Then you fast-forward another 10 years, and all of a sudden, those same entrepreneurs and developers are realizing, oh, there’s this thing called insurance and family planning and healthcare. So you see those investments.
What typically happens, if you zoom in on any one sector, there are the first order of entrepreneurs who see low-hanging fruit; they fix the UI [user interface] and the UX [user experience] and make it more friendly to engage with. That typically results in another cohort of entrepreneurs who have gone past the first-order exposure problem. Then you start to find the deeper-value opportunities, what people would refer to now as infrastructure. When you look at the fintech revolution, what happened first? Betterment was what people call personal financial management tools. But in order to do that, you realize, ‘Wow, it’s really a pain in the butt to get data from banks.’ That results in the likes of Plaid and Stripe that today aren’t the $1 billion robo-advisors; they’re the $13 billion data aggregation company and the $70 billion payment processor.
What I’m seeing now inside of insurtech is very similar. People who have worked inside of insurtech have started to realize there’s a big green field here that is wide open, not for disruption but for improvement. There are areas that may be unsexy, but they’re absolutely some of the most impactful parts of the ecosystem to actually invest in from a technology standpoint.
That’s what gets me excited, to see people who are now looking at this, not from the quick approach, which is, ‘I can optimize the user experience,’ but from the perspective of ‘I’m going to deliver either a real underwriting value or expense value.’ At the end of the day, this industry is comprised of a combined ratio that is your losses and your expenses, and you need to target one of those as an insurtech to differentiate yourself in the market.
What you do with that data is the real differentiator in this market. I mean, insurtechs 1.0 did a fair amount of value creation through the automation of data aggregation—I don’t need to ask you 50 questions, because I know I can pull that from another source. But for insurtech 2.0 the alpha won’t be in ‘did you fill out my form faster.’ The alpha will be, once that form is filled, what did you do with it; how did you think about that data; and how did you make sure that market discovery is being done in an optimal fashion. That’s the alpha. So that’s what we do at Noldor. We try to treat data aggregation as a commodity, to bring down expenses for everyone in this industry: MGAs, carriers and reinsurance brokers.