Working at the speed of insurtech startups
Startups, particularly insurtechs, operate at a pace that most large companies aren't used to and that can cause problems when the two decide to work together. A larger organization’s slower speed can cause friction, lead to a less than ideal partnership for both and impact future partnerships between the two.
However, there are some steps that companies can take to at the outset of the partnership to help limit issues, according to Nationwide’s Chief Innovation and Digital Officer Chetan Kandhari.
“Defining outcomes, identifying decisions that can impede the critical path, and establishing timeframes from the outset of the partnership are necessary for a successful collaboration with insurtechs,” said Kandhari.
Kandhari relayed that advice and provided additional perspective on collaboration with insurtechs to more than 200 attendees of Insurtech NY’s virtual Core Systems Evolution conference on Thursday, August 27. Kandhari discussed the finer points of integrating with insurtechs along with EY’s Dawn Nash and David Kelly of BobTrak.
“It is a rare time in history when legacy systems are on the front page of the news. Insurers must use this unique opportunity of publicity to advance transformation projects that were shelved due to limited resources.” said David Gritz, Managing Director of InsurTech NY. “Nationwide sets a great example for other insurers on how to effectively engage insurtechs to upgrade or expand their current legacy systems.”
Kandhari recalled Nationwide’s experience working with insurtechs for the launch of their new auto insurance brand Spire in September 2019. Being able to agree on outcomes and the decision-making process at the onset of the project enabled Nationwide to bring Spire to market very quickly. From start to finish, the new brand was launched in just seven months - a timeline that was unheard of in the insurance industry just a few years ago.
“Within Innovation and Digital at Nationwide, we aspire to work at the speed of the startup, so I’m fortunate to have the support of resources and teams that can flex to ramp up work on a vastly accelerated schedule when needed,” said Kandhari. “But even if you don’t have those resources and are still working at a slower pace internally, at a minimum you want to make sure that your processes don’t create a bottleneck for your insurtech partner.”
No matter your challenge, Kandhari stresses that companies must be working to solve a problem that is well-defined, with a very specific business, customer, or technology issue to fix. Finding quick wins to gain momentum early on is also critical to help articulate the joint value of the partnership.
“With a well-defined problem, you can more easily identify potential partners with deep specialization and experience in that area, which will make a successful quick deployment much more likely,” said Kandhari.
So, how do insurtechs and companies determine if they are a good fit for each other? When evaluating potential partners, Nationwide asks:
- What accelerators can the insurtech bring to help Nationwide speed up our delivery timeline?
- Do they have the level of expertise we need, and will we be able to leverage it in a plug-and-play approach?
- How can we apply our advantage of scale with their niche capability?
- Will the insurtech help us move our business forward while at the same time help us keep our strategic advantage?
“If the insurtech checks those boxes, then they are probably worth exploring further to see if value can jointly be achieved,” said Kandhari.