In 2020 over $7 billion was invested globally in insurtechs as cited by Paul Chen, Partner at Mayer Brown, who moderated the educational session, “Creating Value in Runoff through Collaboration with Insurtechs.” Fellow Mayer Brown partner Stephanie Duchene joined the panel along with Nick Daley of Plug and Play, Nicos Vekiaridies of Attestiv and Andrew Naoum of EvolutionIQ. The panelists discussed the valuable opportunities and possible challenges facing runoff players in implementing innovative technical solutions in their partnerships with insurtechs, who have been making significant inroads within the insurance industry.
With extensive experience counseling clients on insurance regulatory compliance, Stephanie explained how a “regulatory risk tolerance imbalance” may exist when traditional carriers collaborate with insurtechs. Not surprisingly, the dynamic tech-savvy firms may not be as familiar with the complex regulatory barriers that insurers fully understand. For this precise reason, Stephanie guides her clients to balance out this regulatory risk to avoid any non-compliance financial consequences.
Nick Daley, a Ventures Analyst at Plug and Play, described his company as a global investor and innovator platform connecting reinsurers, insurers and brokers with insurtech firms such as Attestiv and EvolutionIQ. Nick noted the top tier insurance companies have been accelerating their investments in technological solutions incorporating verifiable media, intelligent automation and using AI to optimize workflows via collaborations with insurtechs.
Attestiv CEO Nicos Vekiarides provided an overview of their AI powered insurance solutions platform that delivers fraud protection, automation and a convenient self-service user experience for insurance companies that rely on digital media in processing claims. Nicos described it as a first line of defense to ensure all media associated with a claim are validated through their forensic analysis, which generates a tamper score to determine if any anomalies are detected.
Next, Andrew Naoum of EvolutionIQ, profiled his claims guidance solutions as a data driven decision making platform using AI enabled products. They combine the power of historical claims data, deep unstructured claim analysis and third party proprietary data to enable timely, efficient and cost optimal claim closures. EvolutionIQ accomplishes this by scoring and prioritization of claims based on severity, litigation potential and additional risk factors within the claim.
Paul Chen identified the preferred approaches to collaboration with insurtechs starting off with the lowest commitment level by utilizing standard commercial contracts and/or licenses in purchasing their services. Another viable option is capital investment in the startups either passively or as a majority stakeholder. In this realm, it is increasingly common to include strategic agreements granting investors a first look at developing technologies. Finally, insurance companies eager to accelerate their drive for innovation are targeting insurtechs for prime acquisitions, capitalizing on both technology and talent.
Regardless of which collaboration approach is taken, Stephanie Duchene cautioned that when it comes to integrating new insurance technologies, regulators will be on the lookout for explainability, transparency, and non-discriminatory processes.