By Ed Pulkstenis
Often when we think of InsurTechs, what comes to mind is IQ – intelligence. Insurance is a complex business, technically, functionally, and financially. To start an InsurTech takes brains, creativity and courage. The vision to see a new way of doing things, coupled with the talent to build new systems, create new products, curate new data and deliver it all in new ways is what InsurTechs are all about. And with the rapid development of new technologies, engineers are solving age old problems, making the process both faster and smarter from submission intake to underwriting to service to claims.
It can be tempting, especially from outside the industry looking in, to think that InsurTech is only that: engineers solving transactional and financial problems. Certainly, success requires good technology, ease of doing business, sound underwriting and financial acumen, along with the ability to execute.
But in insurance, as with many other aspects of life, the logical, technical, right brain solutions are only part of the picture. There is another dimension, often overlooked, that is critical for InsurTech success: the people side. Emotions, feelings and perceptions play a key role, in InsurTech success.
Externally, to clients and producers, insurance represents a promise – a promise to be there when things go wrong, and to save a family or a business from financial ruin when disaster strikes. The trust that a client places in an agent or an agent in a company has a deeply emotional dimension.
Clients want to be sure that they have the appropriate coverage. Producers want to know that the trust their clients place in them will be supported and secure in the companies they put forward. a slick entry portal or an innovative predictive model aren’t enough; companies must also demonstrate that they can be trusted to do the right thing, that they are sustainable, and that they will be around for the long term. This is done not just through finances that are raised, but also through the feelings that are invoked. It is accomplished not through engineering but through people.
Insurance has always been a relationship business. The rise of InsurTech has not changed that, rather it has reinforced it. People want to do business with people they know and trust. Producers foster relationships with clients, providing advice, evaluating coverage and building trust. Likewise, they prefer to work with companies, and even favor individual underwriters within companies with whom they can build relationships. InsurTech underwriters who come in alongside as partners to producers, with a genuine desire to connect personally, while creatively, competently, and consistently helping them to write more business, are living proof of the power of the right brain/left brain combination.
But this emotional acumen is not just needed externally; it also plays a critical role internally. Starting an InsurTech often involves building a team from scratch. In contrast to a legacy organization, where roles are well defined, traditions and practices have been long engrained, and individuals are clear on where they fit, a startup has no such boundaries. Like pioneers racing out west to stake their homesteading claims, members of start-up teams must quickly move into undeveloped areas of the business, often wearing multiple hats.
New connection points throughout the organization must be forged. Tensions native to insurance are heightened, for example between products and technology and between underwriting appetite and distribution. Whether the result is high performing, hopelessly dysfunctional, or somewhere in between depends in large part on the emotional awareness and sensitivity of the individuals. It depends on how they feel, and how they make each other feel. When team members like and trust one another, they are much more likely to develop the rhythm of a fast moving, high performing team.
So what’s the EQ of your InsurTech? Are you sensitive to the needs and values of clients and producers, or is it all about the engineering and the data? Do you take a genuine interest in the people you are working with internally and externally? Is it more common for your employees to complete each other’s sentences or to cut each other off? Tap into the power of emotions, feelings, and relationships that are so important to this business. We are at our best when we are using BOTH sides of our brain.