To build, buy or partner, that is the question

The best strategy for exploring insurtech should be a blend of building, buying ad partnering, according to the final panel of Global Reinsurance’s event today.

For the final panel session at the inaugural Global Reinsurance Innovation & InsurTech Bermuda event, delegates were given the chance to decide the theme. The topic of whether to build, buy or partner with insurtech was the winner for the panel of experts.

The varied panel, comprising Hannover Re (Bermuda) chief financial officer Nick Cardinez; Plug and Play Tech Center corporate partnerships manager Hutch Moragne; EY Bermuda principal (advisory services) Chris Maiato; and Two Sigma Insurance Quantified head of business & corporate development Michael Tessalone; showed great synergy in their response to the topic.

Moragne asserted: “You should be doing all three. You should be doing internally things that can be done internally. However, startups have a lot of commitment and they offer a very different type of product.”

Moragne stated that the level of dedication found in those in startups who had committed their careers to their innovation should not be underestimated, and in-house resource was not comparable to it.

He said: “Definitely build internally, but looking externally can also be a huge resource.”

Maiato added: “Often insurers get stuck in this inability to innovate because of the bureaucracy. It’s about getting out of your way and allowing yourself to innovate with your partner.”

Tessalone concurred saying it was important for insurers not to “lose that strategic focus”.

“Where am I getting the premium on and how is that changing my premium landscape?” - Nick Cardinez

Cardinez pointed out that when looking to partner with insurtech firms, there are key elements to consider.

He said: “Where am I getting the premium on and how is that changing my premium landscape? You’re asking us to change our paradigm. One strategy is to get together with others, to understand the technology so that collectively we can improve.”

“It’s important to remember that in these consortia, we are still in a sense competitors, but we need to work together to ensure our industry is still appealing,” Cardinez added.

Hutch adds that the key is collaboration. “One thing that I have noticed with the insurance industry is they are not always willing to look outside. To add to this, they are not appealing to startups. They bother need each other, however. There are gaps on both side of the equation and they need to learn together.”