LIFE AND HEALTH INSURANCE INNOVATION BLOG

Thought leadership, insights, and success stories

3 Venture Capitalists Weigh in on Life Insurance Trends

3 Venture Capitalists Weigh in on Life Insurance Trends

Investors and venture capitalists (VCs) are a vital part of the insurance ecosystem as they invest in new companies that are modernizing the insurance landscape.

Partnerships between insurers and VCs are becoming more common to accelerate innovation and drive industry transformation. But how do you know it’s the right fit?

We help insurers navigate this space and make the right connections that lead to successful partnerships with VCs and startups. This starts with understanding the landscape.

We tapped into a panel of three VCs active in the insurance space to get their point of view on trends in the industry: Ella Seitz, Partner at Esplanade Healthtech Ventures, Karim Gillani, Co-founder of Luge Capital, and Ben Harrison, Partner at Portage. 

TREND #1: Infrastructure Investments are Critical 

The VCs told us they are seeing an increase in infrastructure investments across the industry as an integral component of their strategic plan. As one VC said, “If you want to build new products and serve different customer segments, the tools and the technology that many are using are just not equipped to deliver with the speed or the personalization necessary.” 

According to the panel, this aspect of digital transformation has become about more than replacing outdated systems. Next-generation technologies such as AI, Big Data, and Machine Learning are allowing insurers to reimagine the customer experience and streamline internal processes. Increasingly, these technologies are being considered a core investment strategy. 

TREND #2: The Uberization of insurance can simplify a complex process 

Many insurers acknowledge that buying insurance can be an intimidating, complicated, and scary experience, especially if the buyer is new to the process. As one of the panelists noted, Uber is kind of a cliché, but many insurers still use it as an example of how it is possible to dramatically simplify a complex process. VCs are seeing insurers rethink traditional buying and underwriting processes, investigate new selling channels, and build out the front-end infrastructure necessary to create a simplified, even, enjoyable buyer experience. If you remove the complexity, you remove the intimidation factor and offer a consumer experience that’s easy, friendly, and approachable. 

TREND #3: Partnering plays a vital role in embedded insurance   

Buyers are accustomed to being offered an insurance plan at the point of sale when they buy an appliance or technology device. VCs are seeing life insurers take a page from the P&C insurers’ playbook by embedding insurance information and application triggers into other processes like digital mortgage applications. Since new home buyers often have a family they want to protect, embedding life insurance into the digital mortgage application process creates a natural connection in the buyer’s mind. Partnering plays a vital role in embedded insurance as life carriers need to make connections with those who provide products and services around the big events in life that trigger the need for insurance. 

TREND #4: Investments in health and untapped areas are increasing 

Insurance organizations are investing heavily in tools that help their customers stay healthy when possible and manage chronic conditions when not. It’s a win/win for the customer and the insurer, so our VCs expect this trend to continue for some time to come. The new wrinkle in the mix is that insurers are recognizing the value of underinvested demographic and psychographic segments. For example, women are recognized as an untapped market for insurers. Many are developing solutions tailored to their unique needs as well as the way they think about health and wellness. 

TREND #5: Building VC partnerships help insurers achieve goals more efficiently

Partnering has been going on for a long time in the insurance industry, but it’s accelerating and expanding beyond traditional channel partnerships. VCs can help insurers achieve their goals faster and more efficiently. After all, VCs evaluate hundreds of business plans, startups, and opportunities every year – it’s what they do for a living. Instead of searching the web or attending conferences hoping to find the right partners, they can curate organizations with a similar vision, the necessary technological capabilities, and the right cultural fit for the insurer. We’ve seen first-hand the competitive advantage insurers gain by partnering with the right companies and are excited to continue to make this happen by facilitating strong relationships within our vast network of VCs and insurtechs.

VC Advice for Taking Advantage of the Trends 

Taken as a whole, these trends can be daunting. When asked where to start, our VCs offered four pieces of advice: 

  • It’s never too late to start. It’s easy to feel like you’re behind your peers in the industry, but you can’t let that stop you. Remember, VCs can accelerate the process by curating potential partners. 
  • Know your priorities. Startups spend hours preparing their sales pitch. If you don’t know your priorities and what you’re looking for, you can end up chasing ideas for which there isn’t a strong or vetted use case. 
  • Learn to make decisions quickly. While insurers think in terms of quarters and years, startups think in terms of minutes and hours. To get in on the best opportunities, you’ll need to approach pivot-able moments decisively. 
  • Give feedback. Startups rely on established insurers to be their window into market opportunities and needs. They value any input you can give them.

Partner With Us 

Have an industry challenge you’d like to solve? We're committed to driving innovation through collaboration. We can help you connect with an extensive network of insurers, technologists, entrepreneurs, and venture capitalists to take your project from the idea stage to market launch. Contact Sean Gilday, VP, Strategic Partnerships, to tap into our network of potential collaborators. 

New call-to-action

 

 

Written by: Max Kraus

Max Kraus is Director of Ventures & Partnerships and is responsible for managing the Americas Venture Program at RGAX. He identifies insurtechs within the innovation ecosystem that can help RGA and its carrier clients solve operational challenges and support growth. Max has an Honours Business Administration (HBA) degree from the Ivey Business School.

Stay Informed

Don't miss out on the latest industry news and ideas.
Subscribe for regular updates.