I hear many startups lament the often perceived glacial pace of engagement to integrate and gain traction with their venture with big corporates. Equally, large incumbents are protective of their customer base and have established processes for on-boarding new product and technology solutions, that are designed to protect them from unnecessary risk. Yet they are each other's life blood.

This conundrum was the topic of a discussion of one of the panels at the Insurtech Insights meetup in London, earlier this month, attended by over 5,000 people from across the Insurtech ecosystem. Often at these events, after the shine of the event has faded, the frenetic social media posting has run its course, and people go back to their day jobs via aeroplanes, trains, ride share, electric bikes and scooters, many of the well articulated points of view of problems that would be useful to solve seem to fade away. This one really stuck with me.  

I found myself asking if there really is a single engagement model? I have come to the conclusion that there isn't. Here are a number of points inspired from the panel discussion that debated the issues I thought were worth sharing.

1. Despite what many predicted a few years ago, Insurtech has not disrupted the established insurance sector. 
2. Instead there has been a level set for engagement with the reality of how that works being quite nuanced.
3. Yes, the success of many (if not most) Insurtechs hinges on partnering with existing established players. 
4. However, it is not completely one-sided. The incumbents know that they need to innovate, with outside in thinking, and, agile solutions that genuinely respond to customer needs, if they want to stay relevant. 
5. Yet the slower pace of the large corporate jars with the scarce resources of the innovative startup.
6. There is also a natural tension (as with any innovation) of dealing with uncertainty and being aligned with objectives of what makes success.
7. Despite all the power point presentations of failing forward, and pivoting quickly, the reality is most established insurance firms find failure in any form deeply uncomfortable. Corporate KPIs are built around regular short term (usually quarterly) objectives on delivering metrics that speak to success.  Nobody wants a combined ratio over a hundred or a loss ratio that exposes the profitability of the book.
8. Here there is a fundamental cultural mismatch with a startup. 
9. The forward looking carriers and brokers know that the KPIs for new innovative solutions must measure different things to determine success.  However it is not without accountability. Disciplined tracking of aligned milestones is essential. Many take a portfolio view, recognizing that not all the investment plays will work out.
10. However, even with this, there isn't a one size fits all engagement model that can be overlayed on every partnership.  
11. As with all relationships, the magic happens because of the combined chemistry. Fundamentally this revolves around people who are aligned in their respective objectives. 
12. It's also important to know if you are aligning with product and distribution on the front end versus solutions that offer value elsewhere in the value chain, where there might be different commercial relationships and objectives that are important to foster and understand.
13. On the front end, in as much as delivering new, new business is valuable, many underwriters might find it problematic to expose their book to uncertain loss ratios for the sake of new customer acquisition.  
14. This is the natural conflict of innovative products and solutions and established business processes. The outcome of the former is not always certain and the latter can make it impossible to align objectives. 
15. At the end of the day relationships matter. Being a partner requires more than a transactional assessment of value. It needs a long term view. Where venture capital is important for raising much needed equity; venture capacity is also needed to protect the book from unnecessary loss. Timely access to commercially centered advice in structuring new products that protects you from regulatory risk is also very important.  

We are really excited to work with Insurtech startups as part of our annual Insurathon pitch competition. If you're a startup and interested to find out more, register your interest here.