In September 2019, I co-founded a machine learning startup called ReFocus AI. Our mission ostensibly was to help companies use their internal data to drive better business decisions. If that seems overly broad and profoundly light on details, it was. But I would not let that stop us. Somehow, against all odds - including a global pandemic - we are not only alive but thriving.
As with any worthwhile journey, I have learned some key lessons that have had profound implications for our direction and success. I hope that by sharing them, I can help you avoid some pitfalls that I faced.
What’s an Insurtech?
These days, everyone takes the first 3-5 letters of an industry and puts ‘tech’ behind it. And BAM, that is how everyone categorizes your company. But that does not tell the full story, especially in insurance.
After speaking with more insurance companies than I can count, we incorrectly categorize too many as insurtechs. Yup, I'll say it. Just because you are in insurance and using technology to do something, does not make you an insurtech. Perhaps, if we used this nomenclature a little less loosely, established companies would have an easier time working with emerging startups. For instance, there are many insurance carriers that are using technology to cut friction in the customer experience. These carriers operate under the same fundamental principles as their non-techy brethren. So rather than calling them ‘Insurtechs,’ ‘Tech-enabled Carriers’ would be closer to the truth.
Insurance is not your typical legacy industry
Having worked in space and defense, I thought my basic insurance knowledge would suffice for me to get started. Something about learning as you go… In retrospect, that was pretty stupid (I would never wish to discourage a potential founder from bringing value to insurance, but they should know what they are jumping into). What sets insurance apart from other industries - say FinTech - is the closely interrelated insurance ecosystem. It’s why insurance has been resistant to change for so long.
In insurance, value is also more tightly locked in the incumbent’s favor.
In insurance, value is also more tightly locked in the incumbent’s favor. As an insurtech startup ourselves, we are incredibly lucky that we have as strong an advisory panel as we do. Otherwise, our journey would have been replete with hard knocks and quite a few more stumbles. Surround yourself with individuals that fill gaps in your knowledge and enhance what you know.
The people are great
Imagine doing business with your friendly neighborhood insurance agent. That is what working in this industry is like. At the outset, we were viewed with a fair bit of skepticism. In hindsight, it was not undeserved - a product of speaking about the value we provide in a way that did not resonate. And that could have been the entire story. Full stop.
Instead, insurance professionals graciously took us under their wings, schooled us, told us what they liked and did not like what we were doing, and opened doors they did not have to. In the first months after starting, we scored meetings with VPs and up at some of the largest insurance companies in the world. Why? Because they wanted to help and they love to be of service.
The Journey Continues
For as far as we have come, we still have a significant way to go. And we will continue pressing forward. In the next few years, I am sure there will be more lessons to learn, and with such a great team behind me, I am looking forward to tackling whatever comes my way.