Insurtech interview with Paolo Cuomo, principal at Boston Consulting Group and co-founder of InsTech London.
On 20th April we celebrated InsTech London’s second birthday. We were the first dedicated insurtech association, and believe we’re still the largest globally. We owe a debt of thanks to FinteCH as at various inflection points in our short but exciting life we’ve turned to John Hucker, President of the Swiss Finance + Technology Association, for advice on how to grow an amorphous, organic entity in these exciting times.
I’m not going to go into a long story of our history – there’s plenty already written, plus an article in the upcoming InsurTech Book. Instead just a few thoughts on what has worked in London and why (and where there are clearly some gaps).
Now, doing anything with insurance in London feels fantastically easy compared to elsewhere. There are two interlinked reasons – firstly the Lloyd’s insurance model requires people to talk each other so both meeting face-to-face and having to walk around to achieve that are normal. Secondly, as a direct result, everyone has offices in the same place!
Maybe 90% of the attendees to our events work within a 5 or 6 minute walk of the venues we use. Not only does this make it easy for them to attend (and not cancel at the last minute) but the same physical proximity means that serendipity is rife – people bump into each other in pubs and sandwich shop lines and contacts are made and networks grown in a way I’ve rarely seem in any other geography or industry.
The question constantly asked of course is whether all this bumping into each other and bonding makes a difference to the insurtech innovation that we all aspire to. I genuinely believe yes – in just the last few days a chance encounter in a coffee shop led to my linking up two people considering insurtech opportunities in Kenya; the day after someone saw me and said “wow – you’re exactly the guy I need on an insurtech investment panel on Friday”; this morning I mentioned in a cafe queue I was looking at the opportunities around voice-activated technology to help people with arthritis (who can’t easily use smart phones) and someone overheard and said they were looking at low cost ways of installing voice technology throughout the homes of elderly people on behalf of a health insurer. Beyond just my experience I look at the examples from our InsTech London MeetUps – we believe that dozens of contracts and tens of millions of investment have stemmed from introductions we’ve been able to make at our events, to people who can then very easily have follow up conversations.
So, we have this great advantage, but it does seem that overall the market remains far from innovative on the tech front. Strong margins (until recently), a (partially valid) belief in the “art of underwriting”, a paper-based lifestyle (most trading at Lloyd’s still involves signing pieces of paper), and a general reticence to change – all these have led to a lack of appetite when it comes to discussions around topics such as the smarter use of data or the application of AI. The idea of moving from an annual, backward looking policy, to dynamic, real-time coverage is unimaginable to many of the leaders in the market. Some topics do just seem to get moving – the use of drones and satellite images for supporting claims management seems to have taken off without any fanfare. But wholesale change of how commercial insurance is done is not an everyday lunch conversation.
London is a world leader in FinTech; it is a world leader in insurance. Global domination of insurtech should by all logic be ours. But these things don’t always follow the rulebook, and those of us working hard to push this innovation look anxiously to some of the more dynamics cities in Europe. We see they may have far fewer insurance businesses but they do have far more insurance innovation and we wonder how things will play out over the years to come.
About the writer:
Paolo Cuomo is a principal at Boston Consulting Group and co-founder of InsTech London. Twitter:@pgc_at_work