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Very often people ask what makes Insurtechs or startups more innovative and more successful than traditional incumbents and insurers.

And the answers usually are:

1. They can start from scratch
2. They don’t have to deal with legacy
3. Processes are simple and very agile as company is much smaller with less people
4. Governance is very lightweight or even not existing
5. People are much more motivated
6. People are more skilled
7. …

All valid answers.

But today I would like to add another, in my eyes often an even more important reason:

Insurtechs and startups are managed by people, who still apply the necessary technologies, are very hands-on and know the pros and cons of all their architectures and technologies by being a developer or architect or both.

IT managers and decision managers in traditional incumbents and Insurers,  even at the lowest level of management, had been technologist at the start of their careers, but usually have lost all their technology skills over the years.

I have been with so many banks and insurers over the last 30 years, but I never met a 40 or 50 years old manager being able to develop with the latest technologies, even not being able to develop with a 15 years old Java stack.

And these guys in a faster than ever technology driven disruptive insurance world have to decide and to manage technology projects and innovation.

How shall and can this work?

Startups work differently – developer, technologists, typically the best developers and architects within a Insurtech or Fintech make the decisions, even the most important ones.

What does this mean for the incumbents? 

They have to change their management structure and their processes radically!  Smaller teams, self-contained, connected network-like and not hierarchically, managed by the best technologist within the team. Deciding and working autonomously against company’s strategy.

What does this mean for the IT Manager? 

The IT Manager always has to question himself and change roles regularly. After a time of pure administrative leadership work he needs to go back to projects in order to make his ‘hands dirty again’. Work again as an architect, developer or project lead within the latest project and retrain himself.

The  incumbent and the manager himself should always see the IT manager role as a role for a limited period of time.

If not they will kill innovation and in the long run the company.

This site is about Delivery Thinking.

A hackathon is the purification of delivery thinking. You have to deliver in 48 hours and it must run!

Insurhack is ‘my’ hackathon.  This is the reason why I love to presenting you some insights here.

Have fun and never stop thinking delivery.

Impressions of the second Insurhack

Do it again, but do it better!

This year larger, wider, higher and cooler than our last Insurhack. 

It’s all about software and software is all about developers.

Started with the famous speech from Steve Ballmer we awaited the hackers with the largest job ad ever been created for a developer – Our first World Record this Insurhack.

Developer, developers, developers!

We love them. We need them!

 

 

You have to own the outlet – Electricity is then of a 2nd priority

Since more than a year the Unfallmeldedienst (UMD) is available in Germany (translates to Accident Reporting Service) if your insurer participates (Concept in English).

The customer gets consumer hardware and some additional services, which can safe lives in the case of an accident.  Zurich Insurance e.g.  offers this piece of hardware in conjunction with its motor insurance.

Today this is a general offer for every insurer powered by the GDV, the German Insurer Association.

While this is a ‘socialized and public’ activity within the German Insurance market, and there may be many reasons, why this should be implemented in that way, it demonstrates on the other hand very impressively, how hardware could differentiate insurers and insurance offerings.

What, if only one insurer would offer this service? What if this would go beyond the current capabilities and the insurance company could and would enter the customer’s car and extend its visibility with this new interface?

As already stated it might make sense to provide today UMD as a public service, but Insurers should think beyond and about, how hardware could extend the insurer’s possibilities and innovation power.

Consumer hardware could be an Insurer’s  new product and a new customer channel. The insurance offering just an additional service then – comparable to the iPhone, the app store and the app or Alexa, Alexa Store and Alexa Skills.

Even if this sounds like science fiction and not really as a threat or opportunity Insurance companies should already today think about this trend – take the UMD as an example and inspiration.

Within Telecommunications you can see, what it means, if you are too late or not aggressive enough. T-Mobile or Vodafone and others are fighting since years to prevent themselves from permanently losing the customer interface.

You have to own the outlet – Electricity is then of a 2nd priority.

 

How to survive  the ‘World Digitalization War’

Since many years I’m ‘fighting’ for a platform approach within the financial sector having learned from Apple, Amazon and other successful  non-financial platform companies.

Now this idea is taking off slowly and entering the insurance idea space.

But a Platform Economy is more than ‘Added Value Services’. These (new) services are indeed important parts of a (new) strategy, but only just a fraction of the necessary changes . You still have some action items.

I believe you need to enter two main paths down the road in order to become a true Platform Company:

1. You need to develop your Insurance Company to a Developer Company with software and hardware development skills as core skills, everywhere and all over your company. Not only in IT, but also in business and supporting units. Like in a Startup – 80% of your employees should have an IT background.
2. You need to deploy an Open Ecosystem Platform Architecture, one empowering you with the help of software and hardware to becoming an Ecosystem Insurance Company. One open and distributed architecture, where all parties can easily connect with and develop trust in. A blockchain based core might be the choice.

And adding just new services very likely provided by third parties and delivered through third party hardware and channels is not enough and too short-sighted. Services are the results of step one and two, but not a strategy’s foundation, a transition step, but not a long-term strategy.

If you don’t connect directly to the customer with the help of your proprietary soft- and hardware you will lose the customer in the end or/and your partner takes over.

Connect your partners with your systems, don’t let you being connected to something. If you don’t want to compete only on price then consider the next decade as a survival fight for new insurers in a new digitized world.

Only when you once have deployed your own ‘Alexa’ powered by your own software and connected and controlled by your open and distributed insurance architecture you can label your insurance company an 4.0 Enabled insurer.

Then you will leave these new ‘Killing Fields of Digitalization’ as winner.

 

Today’s hottest Insurance Topics in one Event

Last year we already started to combine Cognitive Computing, Machine Learning with Zurich’s Open Insurance via our new APIs. Everything was more or less very early stage and not yet deployable, but the results of the first Insurhack Hackathon were already impressive.

And a lot of Insurhack’s results were based on Machine Learning and AI.

This motivated us to going further and preparing better for AI this year.

Not only that our Open Insurance API is now live and can be used for productive apps. We have invited IBM to supporting us with their IBM Watson AI and IBM Cloud solutions.

We even created an independent category and award for Open Data and AI solutions.

The developers of the Insurhack event receive free access to Watson, will be trained and can combine Zurich REST APIs with Watson APIs, deploy these solutions directly either on IBM’s Bluemix or Amazon’s AWS, which is available for our developers as well.

The IBM Watson solution is easy to setup and to use. Within a couple of minutes and with the support of IBM Bluemix a developer can create and deploy e.g a Waston based Natural Language Processing dialog, combine this with Zurich OData REST APIs and integrate into the Hacker’s new app.

An intelligent Insurance Chatbot is then just a few clicks away and only the beginning of an impressive potential we expect from combining Open APIs with AI.

Register now.

Don’t miss the chance to training yourself with the hottest and newest technologies, to having a lot of fun and to winning a bunch of money for your next startup and/or business ideas.

Looking forward to disrupting the Insurance business with you!

The new Zurich Open API for P&C is live for three months now.

And the new Zurich Quote and Offer P&C applications are the first customers of this new approach.
But this API was never meant to be an API for our own external and internal applications only.

Our Open API approach is meant as a new business strategy.  A strategy and an architecture, where full automated insurance technology and software becomes a new product for our salespeople.

Our product is no longer an classical insurance product, the new sales product is technology, software, the API. 

And If our new product is different to the products before, we also have to find new ways to promote and to ‘sell’ this new product.

A hackathon like our Insurhack was a first test balloon. Now we are entering the next phase.

We will be represented with an own booth at the  largest trade fair for Startups the StartupCon .
Hopefully our first new customers will be some startups we are meeting there.

We will explain and demo our API, will provide access to our developer portal and provide examples (e.g. ‘Alexa Insurance’).

But this is just the next step.
If you really want to benefit from this strategy you have to set up an independent new sales force for this approach – besides the classical ones with tied agents, broker, direct and the others.

The next generation Insurance Company will be an Insurance, where  salespeople will sell technology and software, if you ask me.

 

When your house binds a policy autonomously when the temperature rises or the water comes!

What an idea! Sounds crazy? Yes, but it’s already possible. With the newest insurance APIs and IoT technology it’s possible to bind a building policy, when your house ‘believes’ it’s in danger. Exactly then, not earlier and not later.

The Zurich REST API supports your ideas.

Your house only needs a policy when your AI system says it’s in danger.

The latest technologies make this fantasy reality and I would love to seeing the one or other ‘crazy fantasy’ Insurtech idea at our next Insurhack hackathon.

All necessary ingredients will be available at our Insurhack:

1. The Zurich REST API for P&C insurance for quoting, binding and issuing a policy
2. IBM Watson for AI training your house to understand when it feels bad
3. TI senors with 9 different sensors for connecting your house to the real world
4. The IBM IoT platform to connect your sensors to your app

And if some time is left maybe a blockchain application as governance foundation for your app to providing a distributed view of the truth – to the customers, the insurers and all other partners once your house makes a decision.

Maybe this vision is not exactly what you would like to develop and maybe not exactly what an Insurance company would like to see as an innovation outcome, but it demonstrates what is possible today.

And I mean today, not tomorrow.

So let`s hack together for today! Register today! Today is the new tomorrow.

Finally my little new red IOT Texas Instruments SimpleLink sensortag arrived from a long and expensive journey from the US.

It was not complicated to connecting the sensor with my SimpleLink app and with my local WLAN and to receiving the first data from the integrated nine different sensors.

Just some additional steps and minutes were needed to connecting the tiny little red magic with the IBM Watson IOT Cloud Quickstart Service.

Now the data was visible in Watson, but not yet useable for my individual software and rules development.

But again only some steps further and after a free registration for the IBM IOT platform data and functions were now also connected for individual further processing and for communicating from the sensor to the cloud and vice versa – with any programming language you like.

But as a lazy guy I didn’t chose one of my known and favorite classical environments.

I experimented with the new and free cloud based and visual IOT integrated RED developmentenvironment.

And within minutes again I created a flow which reads the temperature and pressure data from the tag, processes some rules based actions (later AI) and then decides to post a BIND against a Zurich building policy.

And nothing of the given process here is mocked or faked, everything real with real data and real processes.

And again, not the best use case for these new opportunities, but in my eyes an extremely impressive demonstration how the real world with sensors, some AI and OpenAPIs can work together with little programming to make the world a little more safer and comfortable.

I did this all in minutes, maybe all in all 3 to 4 hours. What if you have the time of a whole weekend like every developer has at our next new #Insurhack?

Register for free and code the next round with me.

Insurtech like Fintech is, in my eyes, an overhyped topic. But don’t ignore the supposed ‘Insurtech threat’ and learn from and handle accordingly.

What indeed is more valid than in all IT decades before is mass technology in general is endangering the classical business models of insurers, especially within the P&C business.

And I don’t mean the companies and startups who are improving or reinventing classical business models and products with faster, better and cheaper new Internet technology.

I’m pointing to the companies who are selling these new mass consumer technologies very successfully.

Companies like Apple, Amazon, Microsoft, but also car manufacturers like Volkswagen or Daimler and all the others will enter the insurance market by selling consumer electronics and then bundling insurance products with electronic goods – the self driving car with motor, the home sensors with building or Alexa orders with household insurance.

Like electricity or 3G Internet insurance is becoming a commodity needed to operating these electronic goods.

This idea isn’t new, but it’s more and more leaving its hype cycle and incubator state.

Why I’m talking about this again and again, first started with the thesis Insurance Companies must become Software Companies (again)?

Because Insurance companies must transform themselves to technology companies. Not only to bringing back lost development capabilities to improving and developing own core systems or to inventing new customer centricity apps, but to developing (electronic) consumer goods which then can be bundled and sold with insurance.

Home automation and self driving cars are just the beginning and partnering with others is just a foundation and mitigation approach I believe.

Large global Insurers like Zurich, AXA or Allianz should be in the position to invest accordingly and to get back into the driver seat before it’s too late.

Insurance is a very slow, regulated and sluggish business. It will need decades for this transformation. This is good and and bad at the same time.

We still have time to react and we still have time to act, now it depends on the perspective.

Most companies think quarterly, often in costs optimizations and short term revenues/profits rather than in long term strategies.

This is why Amazon and Apple are different today, they think and thought and acted with long-term strategies and wide shoulders to stand up against the CFOs :-).