Nine months ago, Mark Dennis and I had an idea to build a business dedicated to bringing #insurtech to life: finding the best teams and ideas, and helping them make it a reality. It took three months to get started – we had real jobs back then – so we have now been learning and experimenting for six months. Here’s what we have found:
Picking the winners
Wow! is a frequent word in the Digital Partners office. So much so that it’s part of our partner scoring framework. We are currently working with about 15 #insurtech start-ups – the number changes frequently – of whom six are public: Blink, Simplesurance, Slice, So-Sure, Trov, and Wrisk. All 15 are different: some focus on user experience, some on using data, some on the sharing economy or on emerging technologies. All have a vision and a determination to live that vision. But so do the 500 or so that we have decided not to partner with.
What we look for is not so original – I imagine it’s written in every VC handbook – but we boil it down to a few simple questions:
- If the business succeeds, will it be massive? High risk and small niche don’t go.
- What makes us think it can succeed? Where’s the demand, where’s the distribution?
- Can the partner’s team deliver it? We really like teams which mix a business builder, tech expertise, and strong insurance product knowledge.
- Does the team and the idea make us say ‘wow!’ when we meet them?
- And finally, can we deliver what they need from us?
I have no idea how many of our chosen partners will turn out to be winners, but we do select carefully. There’s already some in our ‘one that got away’ box: I really like Bunker, but we didn’t have the right product skills to partner with them.
Constant vision, emerging strategy
We set out with the idea of having the ability to execute on four capabilities for our partners:
- Global insurance capacity and operations
- Product, pricing, underwriting and data analytics expertise
- Easily-integrated technology
- VC funding
Those four remain the cornerstones of our proposition. But the balance has changed. Our tech proposition now centres on an API gateway called Mozart, which was something we found we needed after we started to look at carrier integration. Mozart turned a vice into a virtue: as well as delivering our carrier integration, Mozart delivers services to our partners: anything from sanctions checking to full policy admin. We provide a consistent API so that partners can connect more easily to our suite of services. And Mozart will be the delivery vehicle for future AI-based policy servicing capabilities.
We also found that being global is not just a nice marketing phrase. Though our core operations are in Europe and the US, we are already working to bring partners into several countries in Asia. We get a lot of help from local Munich Re colleagues who live the corporate motto ‘Not if, but how’.
I’m a big fan of Bill Fischer’s business model canvas. I drew one in February and I get it out from time to time. It’s like looking at an old photo: it’s recognisably Digital Partners but we’ve grown older and wiser since that snapshot.
It’s the little things
Our main concern in setting up the business was would we be able to execute at the pace of our partners. We did everything we could to enable this: key decisions are made by our core Digital Partners team, we operate our own technology stack, and we make use of platforms like Slack to communicate efficiently. For the big things, we execute well. In some areas we even move more quickly than our start-up partners (not everything our partners do is try-and-iterate: sometimes think-then-deploy is the right model for them).
It’s the little things that occasionally trip us up. For one partner we dropped the ball on a legal agreement. Complexities around a few clauses sent us round in circles, and we didn’t recognise that the agreement unlocked a whole set of other priorities for them, from fund-raising to product filing. We are going forward now, but it cost them time. Start-ups are the only type of organisation where the truism ‘time is money’ is actually true.
The next six months, and beyond
«Making insurance like the rest of the internet»
When I’m asked about our vision now, I use this quote from Mike Rudoy, co-founder of Jetty. I don’t know whether Digital Partners will reach sufficient scale to be the catalyst for change in our industry, though that is our clear ambition. What I do know is that digitalisation will change our industry fundamentally, just as it is doing to every other industry on the planet.
More details on some of our partnerships here.