The Intelligent Quarterly from the publishers of The Insurance Insider

Spring 2018

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Outside the bubble

Alex Hearn

There are tech giants licking their lips at the inefficiencies of the (re)insurance industry.

Instead of sitting back and waiting for innovation to come to us, brokers, carriers and service providers must reach out of their bubble to the tech world for new ideas and fresh thinking.

We are in a golden age of technological innovation. The impulse is for the industry to approach these new technologies from a traditionally risk-averse perspective and under the shadow of a business hat: "how can we insure these new risks?" as opposed to "how can we capitalise on these new technologies to improve our services?"

With the transformational impact technology has had on other industries in the last decade, the last view is not simply an interesting strategy, but an urgent requirement if the industry as we know it is to stay competitive.

In 2012, I left a job as a Lloyd's broker with a global broking house to set up a central content hub for the industry in the form of a social network, called MySlipcase. The start-up was accepted into the "Google Campus" - a tech hub beside London's Old Street "Silicon Roundabout. Being surrounded by new ideas was instantly productive and enlightening in comparison to the "happy as we are" culture I was used to inside the (re)insurance space. It felt like creativity at its best: scientists, doctors, mathematicians, veterans, people from every walk of life, coming together with one thing in common - a passion for innovation and progress.

Not only did the (re)insurance industry not attract these creative minds, it had no obvious urgent appetite to do so. has now evolved into a central content distribution platform for organisations and publications inside the industry and our growth has recently gained us a $1mn development investment from an external software company.

Although we still have a long way to go, the adaptations we have made along the way are down to a "lean" attitude adopted from tech consultants we have worked with to make us investable.

We are now changing the way professionals at every level access the industry's best and most relevant content. Although this is obviously on a very different scale, I have seen first-hand the invaluable and forward-thinking perspectives from creative minds across the tech world, and there is no doubt that many could add value at a corporate level.

I have the utmost admiration for the traditional characteristics that make up the (re)insurance industry. In no way would I argue that everything has to change, but modernisation, adaptability and efficiency can only be positives and technology is the ultimate tool to support this.

The "too big to fail" attitude is a strongly prevailing view so I want to look into a couple of other large industries where major disruption has happened fast.

Uber, a mobile app providing a cheap and easy taxi service, was launched in June 2010. This year it will carve out a projected $10bn chunk from the annual taxi market in the 290 cities in which it is now used. Rapid disruption in the taxi industry has ensued and yet what has London's black cabbie been left with, apart from an extremely sour taste in his or her mouth?

The traditionalist would say that the quality of the service offered by a black cab is a worthwhile differentiator. The rigorous training they go through to qualify is indeed impressive and they have spent years understanding the roads and refining their journeys.

However, when every (albeit relatively unskilled) Uber driver has access to satellite navigation, which adapts to traffic and generates a trackable path for the client to verify, at a lower cost, even the most traditional among us will appreciate the benefits.

Disruption in our industry may not be a David and Goliath situation like Uber was to the taxi industry, but more likely a Goliath and Goliath. The threat from Google/Amazon/Oracle/IBM/Microsoft HQ has already begun its encroachment into the personal lines sector.

A second example would be the recruitment industry, which has seen transformational change from the likes of and of course LinkedIn.

Marc Andreesen, who sits on the board of some of the world's largest software companies including Facebook, eBay and HP, claims LinkedIn is the natural successor for the recruitment industry: the "fastest-growing recruitment company in the world, poised to eat the $400bn recruitment industry".

In a seminal Wall Street Journal article, Andreesen argues the next 10 years will see every industry vertical disrupted by software, with incumbents replaced by fast-growing online companies.

The list goes on, whether it's iPhone disruption in the mobile phone industry, Spotify and iTunes in digital music or social media in the marketing industry. It has happened so frequently in the last decade alone, so why does it seem so impossible that it could happen to us? Despite the unarguable need for expertise and sophistication, it is no secret that the (re)insurance sector, a multi-billion dollar global industry with a dated current application of technology, is vulnerable to disruption.

Click to enlarge I met with a successful financial technology (fintech) venture capitalist recently who could not understand the concept of a broker with a six-figure salary walking around a marketplace with a pile of paper, queuing to see an underwriter who may or may not participate in what it is they have to offer. After explaining the rigid and, I believe, justifiable need for face-to-face negotiations in the industry, the discussion then turned to immediate and realistic solutions that can support this core characteristic: iPads for brokers and responsive touchscreen technology for underwriters; enabling digital slips; digital signatures; interactive reports; scheduled appointments; digital stamps; automatic messaging; and basic endorsement digitisation.

All of these would protect the face-to-face, relationship-driven market while drastically improving efficiencies for both the broker and carrier. This would at least be a first step, no doubt ruffling feathers and upsetting traditionalists. But for anyone outside the bubble looking in, this is a step that should have been taken a decade ago.

Global investment in financial technology ventures tripled from £2.72bn in 2013 to £8.18bn in 2014, according to Accenture.

UK Trade & Investment's Financial Services Investment Organisation, run by ex-Lloyd's of London executive Sue Langley, also published independent research suggesting the fintech market is worth £20bn to the UK annually. The total has increased by almost eight times since 2008, making the UK the fastest-growing region for fintech investment globally. Outside the bubble, innovation and technological progression is thriving in every neighbouring financial services industry on a global scale. The UK is the fastest-expanding region for fintech investment and the global hub of our industry is in London.

The environment could not be better, so is it not about time the industry had a change of perspective and embraced technological innovation in every respect? Far better we react faster to changing technologies than become yet another case study in revolutionary tech disruption.

Fintech funding boom


How much is funding to fintech start-ups booming? Almost $14bn in the last 12 months - from less than $1bn in Q2 2010 to nearly $3bn in Q1 2015.

  • Funding in last year: $13.7bn
  • Year-on-year funding growth: +45.83%
  • Deals in last year: 821
  • Year-on-year deal growth: +16.41%
  • Average deals per quarter: 150
  • Average funding per quarter: $1.31bn
  • Biggest quarter ($ funding): Q2 2014
  • Biggest quarter (number of deals): Q1 2015

Source: CB Insights


Alex Hearn is managing director of

This article was published as part of issue Autumn 2015

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