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The Rise of the Digital Ecosystem for Insurance

We had a great time last week at InsurTech Connect, the world’s largest insuretech event, in Las Vegas. The event, as described by co-founder Jay Weintraub, is to “make sure that the best people ranging from tech entrepreneurs and investors to insurance industry incumbents are present.” We enjoyed mingling with and presenting to the prestigious crowd.
As we had previously announced, our Chief Revenue Officer, David O’Malley, was a featured speaker, presenting “The Evolution of the Telematics Ecosystem,” and also moderating a panel, “The Rise of the Digital Ecosystem” with executives from several other tech companies, including:

  • Mark Purowitz, Senior Partner, Deloitte Consulting LLP
  • Tomas Revesz, CTO & Co-founder, EverQuote
  • Neil Betteridge – VP of Strategy, Guidewire
  • Jeff To – Global Head of Insurance, Salesforce
  • Haley Smith, Director, State Auto Labs

It was a lively discussion focused on various aspects of the insuretech ecosystem: how insurance agencies are adapting new technologies, telematics role in the evolution, what each of these companies is seeing and what to expect for the future. A synopsis is below in case you missed it!


David opened the conversation with by exploring the major consumer, business, and technology trends that are leading to increasing innovation in the insuretech space. It quickly became clear that the increasing connectedness of the internet of things, the rapidly growing pace of data collection, and improvements in tools to understand and analyze data are changing the way insurers interact with customers.

How is the growing reliance on technology impacting customer expectations?

Hayley, State Auto: That’s a very broad question but digital is important for delivering the best, most straightforward experience. Believe it or not, some carriers are still mailing paper checks to settle claims. At State Auto, we transitioned two years ago and are now a fully digital company. Customers want a simple, easy experience and technology provides that. Some of the other ways we are improving the customer experience include automating underwriting for both personal and the small commercial auto lines, using drones to capture aerial imaging for more accurate pricing, and offering smart home devices to reduce home risk. At State Auto, we are always asking questions like ‘how can we make insurance a thoughtless process for the consumer? How can we create a great experience during claims?’

Jeff, Salesforce: Customer experience is now one of the three most important bases for competition in insurance, today. Insurers are now competing against the major tech companies who, for the most part, have customer experience figured out. This shift has and will continue to change the products and services Chief Innovation Officers focus on.

Mark, Deloitte: The industry has traditionally built and owned everything in insurance – an owned interaction model. The industry no longer owns that narrative. Insurers no longer have the ability to dictate to the customer but have been slow to recognize that. Customers want a spectrum for sales channels (from direct to agent). Partners are better set up to create these engagement streams. It’s similar to the change we saw in banking – there used to be just a teller and you could only conduct business during bank hours, now there are 8-10 interaction points. Insurance is starting to realize they need the same model.

What is the value of the ecosystem for reducing friction for the consumer

Tomas, EverQuote: Pricing is an important conversation. Everquote balances the pricing needs of both the consumer and the insurer. Getting both sides connected more efficiently has been the challenge. Digital insurers need to create a more seamlessness handoff between their platform and the insurer. Often these integrations don’t exist. The ecosystem is helping to build this seamless connection. We must deliver the consumer through just one click or phone call to the carrier. There is no need to refill forms 12 times. We’ve seen a 40% lift to bind rates due to a more seamless experience.

Neil, Guidewire: We see a growing interest from our customer base to move beyond “How do I get people to come shop?” to “How can I be in the right place at the right time?” When consumers are shopping we need to be able to offer the protection that they need in the context of their shopping – for instance, auto insurance when finding a car online. Value-added retailers are helping ensure policyholders get the right protection. We also need to continue to look at how we can use non-traditional channels effectively to reduce consumer friction.

How will increased use of autonomous vehicles impact telematics?

David, Octo: The entire world of auto shifts.

Mark, Deloitte: We offer the foremost research globally on the future of mobility. Where is the auto insurance industry going to evolve? By 2040 insurance will shift from a personal lines product to a commercial line for shared mobility.

Tomas, EverQuote: Ultimately, telematics is representative of a broader trend. Insurance products will increasingly be personalized to individual consumers and risks. Telematics enables more personal products, individualized pricing, and personalized experiences. We will build a personal risk marketplace across industry verticals. Consumers will want a place to manage and govern their data-to-insurance relationship. An IoT for insurance platform will be that system.

What are three barriers to digitization?

To, Salesforce:

  1. Consumer adoption – the products you are putting in the market are new. Channels for distribution are new. You have to get consumers to reach that tipping point.
  2. Legacy systems and culture and workflow – Getting people to change the underlying systems.
  3.  Culture challenges – many insurers still have a ‘build it here’ mindset. Overcoming ‘today is good enough’ is a major barrier

Hayley, State Auto:

  1. Make friends with legal and compliance teams. Slow moving contracts kill partnerships and delay innovation.
  2. Lack of trust in external partners – If you are going to work with external partners, you need to trust them and be willing to take risks.

Is anyone using telematics for underwriting?

Hayley, State Auto: We have a leave-in program at State Auto. We look back at the last term and will rewrite a policy. We both discount for good driving behavior or surcharge for risk. We also use telematics on the claims side and are one of the first in the industry to do so. With it, we receive real time data of crashes and can reach out to the policyholder in real time. This allows us to improve that experience – send an Uber or tow truck, etc. to immediately help the consumer.

What are your additional use cases for telematics / insurance IoT?

Neil, Guidewire: Italian companies have been using telematics for claims for over a decade. Guidewire gets robust rich data when a crash occurs. We then orchestrate this data, pull in other data, and kick off processes like estimates, tow trucks, garaging, rental cars, etc. To add to our earlier discussion, we’ve seen many “random acts of innovation” across the industry – where the full customer experience isn’t taken into account. With our telematics-driven crash and claims process, we’ve really thought through the customer experience and how we can improve it.

What is the customer journey and how do we use technology to improve it?

Mark, Deloitte: Insurtech has been trying to disrupt carriers. So far, we see insurers doing a great job identifying one piece of the journey and fixing it, but the rest of the process is still bad and broken. The customer journey overall is the most important. How can your ecosystem partners improve the whole customer journey? That’s what we need to be analyzing.

Jeff, Salesforce: Hagerty Classic Car Insurance does a great job with relentless customer centricity. Understanding the passions of the customer has led to ‘authenticity at scale.’ They are building a community around the common passion of antique cars. Ask yourselves, how can you piece together the ‘best’ solutions but build it around the passion of your end customer?

The customer wants transparency and value-added services. How they get it should be completely invisible to the end user. Your end users don’t care if they receive a seamless experience.

Hayley, State Auto: State Auto is 100% bought into the open ecosystem. A lot of startups undervalue knowing the insurance industry. We have to be open to partnerships. We are an insurance company. We underwrite risk, manage claims, but the customer experience and journey are driven by our partners. We will never be a hardware producer, so we need our partners. We are not a software company. We could never build Guidewire’s systems.

Jeff, Salesforce: Yes, it’s no longer “Should we partner?” but rather, “How fast?”

Neil, Guidewire: Our partnership program is relentlessly focused on adding value through the insuretech ecosystem. I am always trying to make it as easy as the app store to partner with all the new insuretech out there

Mark, Deloitte: Inherent in this change are some massive shifts in insurance. Insurers are not prepared. How are different insuretech innovations being leveraged? Business unit focus kills insuretech. Insurers need to look at it and keep them at a strategic level. You need to have a mechanism outside standard operations to focus on innovation, set yourself up for the future, and find solutions. Then weave it into the organization.

Tomas, EverQuote: Missing is the economic incentive to invest in digital products. Getting people to skip three steps to improve binding rates. Asking for integrations, etc. It’s hard to innovate on ‘It looks nice and will be nice for the consumer’. Improving bind rate by 40%’ makes the conversation much easier.

Overall, the takeaways are that the insuretech industry continues to evolve, and insurance providers need smart partners to best leverage these innovations for their policyholders, and their bottom lines. The ecosystem and innovative technologies are growing and valuable, and need to be leveraged by agencies. Consumers expect fast, simple and straightforward services – with those, they are likely to remain loyal customers for years to come.

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