The Insurance Industry: Where Do We Go From Here?

Did wave one of Insurtechs kill the desire to innovate?

For those of you who don’t know, I worked at Insurtech for several years. I came from the carrier side and was captivated by the idea of leveraging technology to solve or improve our industry. And I still do, by the way. 

And, for those who worked in the industry between 2015 and 2020, you’ll remember how “hot” Insurtechs were, so much so that they began popping up in every market. In pairing modern technology solutions that allowed broader and rapid distribution with traditional portfolio management, there was always (and will always be) direct conflict that hindered profitable growth and innovation.

As we saw, (re)insurers and risk partners began pulling away from Insuretechs, leaving out niche growth opportunities for emerging risks. Today, it’s common to hear the phrase, “We don’t work with Insurtechs,” from large and legacy capacity providers as they feel they were burned in the past. And understandable. 

But can we entirely blame the Insurtechs? They offered the promise of innovation and niche solutions. But were they set up for success with the industry’s legacy tooling and infrastructure? Would Amazon (UGH! I need another example!) be what it is today if it relied on Guidewire, Microsoft, and unattached PDFs from email threads? No. And why is this a problem? New and evolving risks are coming our way (climate, cyber, cannabis, habitation, auto, etc.), and Insurtechs and legacy carriers are pulling back.

Where do we go from here?

I firmly believe data transparency is the only way we can confidently protect against tomorrow’s risk. There is tremendously valuable data flowing through the industry today, but it’s lost with the simplest mistakes. Manual data entry, outdated records, and inconsistent data collection practices contribute to inaccurate and incomplete datasets and reporting delays, directly impacting the (re)insurer(s).

We must create the infrastructure to narrow lags and enable real-time data transparency to drive profitable innovation. Of course, in a moment, I’ll discuss how Vellum is turning data into insights, but first, I want to ask the industry a simple question.

How is your commercial portfolio doing at this exact moment?

For most, the answer is a simple no. To “quickly” gain those insights, a chain of email threads begins with various partners (internal and external) that culminate in a series of unformatted spreadsheets, PDFs, and historical knowledge that don’t speak to one another. 

It’s striking that a trillion-dollar industry relies on spreadsheets for critical data analysis. I’ve seen firsthand the challenges that arise when data doesn’t flow smoothly through the value chain. It’s not a lack of talent—there are brilliant data scientists in this industry. The issue lies in data readiness. How can we expect professionals to make nuanced, strategic decisions about selection and pricing with messy or incomplete information?

How did Vellum begin?

In founding Vellum, I wanted to provide a solution that revolutionizes how carriers and reinsurers interact, making innovation less scary through transparency and deeper partnerships. 

Vellum’s data ingestion process handles various file formats and shapes, transforming them into a standard data model. Data mastering is crucial, ensuring consistency not only in column names but also in the content itself. This standardization allows for efficient querying and integration with broader data ecosystems.

The platform’s portfolio analytics are insurance-specific, designed to save time and provide actionable insights. Automated portfolio monitoring helps users quickly identify compliance issues and performance deviations. 

Ultimately, Vellum fosters better partner connectivity, creating a shared understanding of data receipt and validation.

Where do we get started?

It’s simple. Reach out. Suppose you want to streamline operational and financial workflows, improve data accuracy, and transform your portfolio data into real-time insights you can leverage as a competitive advantage. In that case, our team wants to help you achieve this. 

We’re developing features to help our clients communicate more effectively with their risk partners and provide the transparency they need. If this interview or post resonates with you, I’d love to start a conversation about how we can partner to improve your data.

Warmly, 

Jules