Very often people ask what makes Insurtechs or startups more innovative and more successful than traditional incumbents and insurers.
And the answers usually are:
- They can start from scratch
- They don’t have to deal with legacy
- Processes are simple and very agile as company is much smaller with less people
- Governance is very lightweight or even not existing
- People are much more motivated
- People are more skilled
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.