Tech City UK’s fintech delivery panel has created a new subgroup focused specifically on insurtech and innovation. Its chair, Will Thorne, innovation leader at the Lloyd’s Channel Syndicate, discusses the insurtech scene in the UK, and what the new subgroup hopes to achieve
How established is the insurtech scene in the UK at the moment? What is it lacking that required the formation of the new insurtech board?
Will Thorne: The UK insurtech scene is recognised as one the most prominent worldwide. The number of insurtechs based and operating in the UK is increasing quickly. There are some brilliant examples of insurtechs working to solve problems affecting consumers and insurers that have either started in the UK or have come to the UK after launching in a different market. Several of those companies are represented on the board itself, including Cuvva, Brolly and Bought by Many.
The UK benefits from a number of forward-thinking insurers that are trying to use innovation and technology to drive their companies forward, and of course from the concentration of capital, expertise and market access offered by the London specialty (re)insurance market. There are also various bodies that already exist and serve to promote the interest of their members, including Instech London and Innovate Finance, and we benefit from a regulator with a positive reputation for innovation.
However, UK insurtech is not as well developed as UK fintech. The Insurtech Board was launched by Tech City on behalf of the Treasury to address the fact that there has been a lack of a single body to bring together—and represent the interests of—all interested parties in order to work together and make it easier for insurtechs to start in the UK and to scale up quickly.
We believe that enabling better, easier collaboration and access to insurance and regulatory capital will make the UK a more attractive prospect for entrepreneurs and will add value to incumbent players and insurtechs alike. All of the issues we hope to resolve were identified by listening to insurtechs, (re)insurers, brokers and market bodies, and our vision sets out the key initial priorities based on those discussions.
Are there any particular technologies the board wants to promote, or is it a case of getting all of these heads together first, to plan accordingly?
Thorne: The board’s purpose is not to promote specific technologies, rather, it operates to help the industry find ways to innovate successfully. This includes making it easier, where possible, for insurers and insurtechs to implement technological innovation in the quickest and most efficient way. This should have an immediate, positive impact on the buyers of insurance, whether they be consumers or corporates, especially where technology has a positive impact on their claims experience.
What does the board want to achieve in terms of insurtech standardisation?
Thorne: One of the common difficulties faced by insurtechs is that each sales cycle, partnership agreement, managing general agent contract, or even a simple non-disclosure agreement, tends to be different from one insurer to the other, which can be time consuming and frustrating. Insurtechs waste money treading water.
The Fintech Delivery Panel is already working on similar issues in the fintech space, and this was an obvious immediate priority for the insurtech board. A standard basic contractual structure for a proof of concept, for example, could help insurers trial new technologies in claims processes quicker.
What about regulatory processes?
Thorne: While we have not yet set up a working group focused solely on this topic, we keep in regular contact with the Financial Conduct Authority’s innovation hub, and welcome input from those in the industry about any particular regulatory processes or other issues that might prevent insurtechs from adding value. Helping insurtechs go through insurer onboarding processes and satisfying regulatory requirements—for instance, being appointed as claims third-party administrators—as efficiently as possible is a key part of our vision.
How far along is innovation in claims?
Thorne: There are plenty of exciting claims innovations already in the UK, and a number of insurers are working with startups in this space. That being said, it is very important that we persuade claims-focused insurtechs in other territories such as the US to consider the UK as a natural second market, in order to widen the pool of available solutions.
We would also encourage insurers to be open about issues they are trying to solve, as this often stimulates innovation.
Will Thorne is chair of the Insurtech Board and innovation leader at the Lloyd’s Channel Syndicate