AdvantageGo’s Summers: How insurtechs can survive hard markets
Market-facing insurtechs need to find niches and focus on solving problems for their clients, according to AdvantageGo’s global business leader Ian Summers.
Speaking to The Insurer TV at the Monte Carlo Rendez-Vous, Summers said insurtech is a “very fragmented” market, and that firms need to be cautious when introducing new ideas and concepts outside the end-to-end model. He stressed that insurtechs’ main aim should be to help clients solve their problems.
The most significant issue clients face when buying an insurtech solution is they often purchase only “a very thin sliver”, perhaps solving just one specific task, and must then combine them all.
“For a client, that brings two challenges: it brings in the challenge of contracting with them, and it brings in the challenge of integrating them and getting the right ones. What we are trying to do there is help solve these problems for our clients,” he explained.
Summers said insurtechs need to specialise to find their role in the market. “They need to reach out either side of them, [or] up and down the stream from where they stand. An insurtech trying to do everything, at the moment, is just not going to be believable,” he explained.
As one of the service providers in Lloyd’s Blueprint Two digitalisation strategy, Summers provided insight into the massive project. He said people underestimate the scale of the work being done to move data. “The last time that [a data project] worked well was back when electronic claims files came in – you’ve gone from paper to electronic. We're now doing the same thing and structuring the data movement at the front of office.
“What’s working well is the new collaboration. In the past, you had less market engagement from suppliers and the actual operations sides of businesses … This time round, that's been ramped up very significantly, and it's paying back dividends.”
He praised the collaboration between AdvantageGo, the Blueprint Two leadership group and the other partners. “It’s a much more integrated approach and it's more pragmatic and realistic.”
Much of the MGA space has faced challenges recently, which as a supplier Summers said he feels “quite acutely”.
“You’ve got to pick the winners because it is pretty cutthroat and the margins are tight,” Summers explained. “They're great clients, and [if] they're expanding and incubators, even more so. From that perspective, it's all about making sure you're finding the right partnerships.”
He said the key to picking winners was believing in their business plan. “The big investments we'll make [are in] ones where we can see a business plan that aligns well to our software and our strategy, and we greatly believe that we can provide benefits,” Summers explained.
“If you're data driven and you're algorithmically approaching the world, taking that digital experience is key for us. I'm sure MGAs in other spaces will do well as well, but these are the ones that we're backing.”
Watch the interview with Ian Summers to hear more about:
- How finding a niche and supporting clients is key for insurtechs to survive a difficult market
- Why collaboration is crucial to Lloyd’s Blueprint Two project
- The main challenge in the MGA space is choosing the right investments